The Medical Credit Fund (MCF) is the first and only debt fund dedicated to financing small- and medium-sized enterprises in the health sector (“health SMEs”) in Africa. MCF has an innovative ‘layered capital’ structure, blending catalytic first- loss capital, technical assistance grants, and debt financing. MCF provides loans and technical assistance to health SMEs to increase access to better healthcare services for low-income patients. For the loan program, MCF works with local financial partners (e. g. , local banks) to distribute loans, which are either jointly funded or facilitated through a guarantee program. All loans facilitated by Medical Credit Fund are linked to a technical assistance program.
MCF is steadily growing its fund size and loan portfolio, maintaining its focus on development impact while refining the financing model to achieve financial sustainability. To date, MCF has achieved impressive development results at the patient, company, and market levels and looks to raise additional impact-oriented capital in the future. The design and implementation of MCF presents useful insights for others considering blended finance approaches for the health sector:
- Development impact can come first in blended finance solutions;
- Technical assistance bolsters both financial returns and development impact;
- Local partners allow for both operational and financial leverage, but should be done responsibly; and
- The pathway to financial sustainability can be demanding for impact-first vehicles.