The Medical Credit Fund has raised $17.45m from the Overseas Private Investment Corporation, Calvert Foundation, a private foundation and a Dutch private family office for healthcare impact investments in Africa.

This new injection will allow the fund to further catalyze healthcare investments and achieve greater impact on healthcare for underserved populations in sub-Saharan Africa.  Since 2010, Medical Credit Fund (MCF) has been working to provide access to credit for small and medium-sized healthcare enterprises in Africa. 

So far, more than $16m in loans has been disbursed, leading to quality improvement at about 70% of the facilities.

While MCF will continue to cater to the needs of these health SMEs, the expansion will allow the fund to simultaneously meet the demand for larger and more flexible loans. 

It can now facilitate loans of up to $2.5m, a significant step up from its previous $350k ceiling. 

Also, MCF said it can now finance not only healthcare providers, but also other players in the healthcare sector such as medical education institutions or suppliers of medicines and equipment. 

Finally, the expansion will enable MCF to explore new partnerships in other countries in sub-Saharan Africa. 

As part of the mission to enhance affordable quality healthcare services for underserved populations, the loans are connected to an elaborate clinical and business improvement program offered in collaboration with PharmAccess and local technical assistance partners.

OPIC and Calvert Foundation were on board as one of the first investors in the fund in 2012.

Elizabeth L. Littlefield, OPIC's President and CEO, said: “Medical Credit Fund has truly been exceptional in their contribution to development by expanding the healthcare that is provided to low-income patients in Ghana, Kenya, Nigeria, Tanzania, and Uganda. OPIC is pleased to support Medical Credit Fund as they continue to provide financing to small and medium-sized healthcare clinics throughout Sub-Saharan Africa.”

Beth Bafford, Investments Director at Calvert Foundation, added: ”We are thrilled to begin the next chapter of our relationship with MCF. Over the years, MCF has delivered proof of the power and impact of credit for businesses working in underserved or overlooked sectors. Their unique mix of capital, business and clinical support has yielded tremendous results. This new financing will also allow them to diversify outside of clinics to meet the needs they see evolving across medical education, supplies, devices and distribution.”

The Medical Credit Fund is a hybrid investment fund, which attracts public and private grants and capital. 

Grants are applied to finance the technical assistance programs, whereas capital is used to finance loans and guarantees and to maintain modest default and currency risk facilities.

Since starting operations in late 2010, MCF has made considerable headway in showing that health SMEs are bankable and that investing in the private healthcare sector pays. 

Its risk reduction and risk sharing model has been successful in attracting banks into the healthcare sector. 

The on average 97% repayment performance makes for an attractive portfolio. 

Now, banks regularly take the lead in seeking collaboration and are starting to take an increasingly large share of the risk in loan agreements with MCF.

Monique Dolfing-Vogelenzang, Managing Director of the Medical Credit Fund, said: ”We have built strong partnerships, established more efficient processes and disbursed hundreds of loans to healthcare providers who were able to improve the quality of their services as a result.” 

“This track record would not have been possible without the commitment of our donors and investors, who recognized the business potential as well as the social importance of investing in the private healthcare sector. We are very proud to be taking this next step and look forward to achieving even more impact together," she added.