The Medical Credit Fund (MCF), with support from the UK’s CDC Group, recently published a study which highlights private healthcare investment opportunities in Côte d’Ivoire and Senegal.
According to the study, there are few large (more than $1 million) deals to be made in the private health sector in these two countries because there are not many health SMEs big enough to absorb this amount of lending, and there is heavy competition from local banks for the few that are.
However, there are three segments of health SMEs in Côte d’Ivoire and Senegal that are ripe for investment.
- High-growth-potential clinics. This is the next tier down from the largest health facilities, that with time, technical assistance and smaller loans (of at least $100,000) could grow to become among the largest health facilities. These include clinics with high potential that could grow into polyclinics or hospitals or expand to offer imaging services, and imaging centres that want to upgrade high-value equipment.
- Medical and paramedical practices. This group constitutes the greatest number of health SMEs in both countries, and those that have the greatest challenges to access formal financing. There is great social impact to be achieved by financing this segment, because this group of SMEs provides vital primary care for lower income communities. To be profitable, some sort of economy of scale in lending is needed to offset the smaller value of each individual loan.
- Wholesalers, both pharmaceutical and medical equipment. Increased lending to this segment will have a multiplier effect since it will allow companies to offer additional supply chain financing to their clients.