(Ecofin Agency) - The institution financing small and medium-sized enterprises (SMEs) in the health sector in Africa, Medical Credit Fund, unveils plans to strengthen its financing business on the continent. The company has raised €32.5 million (about $37 million) from a group of investors through its second investment fund MCF II.

In an official note released on December 14, the fund manager said it will strengthen its financing offer to primary, maternal, and child health care providers in sub-Saharan Africa while expanding its Cash Advance digital lending service in the region. “Our commitment to MCF II will enable the Fund to increase its flexible finance offers to an estimate of over 2,500 healthcare SMEs, bolstering their ability to meet the increased demand for quality healthcare and to serve approximately 10 million patients by 2030. Strengthening Africa’s healthcare system is an immediate priority that demands dedicated healthcare financing to help close the funding gap in the market,” said Clarisa De Franco, MD & Head of Private Equity Funds at CDC Group. The latter is one of Medical Credit Fund’s backers.

This comes two months after the Fund and the U.S. development finance institution (DFC) established a technical assistance facility for health care providers in sub-Saharan Africa. In this region, 50% of health care is provided by the private sector. However, SSA faces many challenges, including limited capacity and quality of care. Small and medium-sized healthcare providers still have trouble accessing credit to expand their healthcare activities and services.

Beyond this financing, Medical Credit Fund hopes to raise about €80 million in capital from public and private institutions over the next few years. The fund manager says it has provided more than 6,500 loans to healthcare providers in Africa since its inception in 2009. This makes more than €120 million provided to over 1,800 healthcare SMEs in Kenya, Ghana, Nigeria, Tanzania, and Uganda.

Chamberline Moko