Success Stories

Catalyzing More Than $145 Million in Financing for the Private Health Sector

Limited access to financing for private health providers inhibits their ability to contribute to improving public health. Through the USAID-funded Banking on Health project, Banyan Global has worked with more than 21 local financial institutions in 10 countries, helping private providers in developing nations secure more than $145 million in commercial financing.

The private health sector plays a critical role in improving public health outcomes in developing countries. Donors and governments acknowledge this, but they struggle with a number of issues when partnering with the private sector, including how to improve quality, integrate essential public health services (such as family planning and HIV/AIDS prevention and treatment), and achieve significant scale.

Lack of access to finance limits the private health sector's ability to contribute to improving public health outcomes. Credit drives private sector development; financing is an essential input that can be used to expand the range and types of services, enter markets, and improve services. In many developing countries, however, it's very difficult for the private health sector to get financing from local institutions. There is a problem on both sides – many banks are inexperienced with health-sector lending and believe that private providers pose unacceptable risks, while many healthcare businesses don't have the skills to prepare a bankable business plan.

As the technical lead and a subcontractor to Abt Associates on the United States Agency for International Development (USAID)-funded Banking on Health project, Banyan Global has expanded access to financing for private health providers worldwide. Banking on Health improves the ability of private health sector businesses to access credit, boosting their capacity to deliver quality reproductive health and family planning services. Banyan Global takes a three-pronged approach to increasing access to financing.

• Working with local financial institutions to promote health-sector lending. Banyan Global provides training in health-sector lending, loan-product development, market research and referrals, and assistance in structuring loan guarantees.
• Improving credit-readiness among private health providers. Banyan Global designs and delivers training for private health providers in business administration, financial management, and access to financing. Banyan Global builds the capacity of local business-development service providers to reach the health sector.
• Facilitating networking and improving market linkages through trade fairs. Banyan Global works with local organizations to host private health sector trade fairs that link private providers to financial institutions, pharmaceutical and equipment suppliers, business-development service providers, and representatives of the ministry of health.

Through Banking on Health, Banyan Global works in 10 countries: Ethiopia, Georgia, Jordan, Nicaragua, Nigeria, Peru, the Philippines, Romania, Uganda, and Zambia. All told, we've leveraged more than $145 million from commercial banks and microfinance institutions for the private health sector. Some examples:

• In Peru, Edyficar, a microfinance institution, has launched EdySalud, a special loan product targeting midwives and other providers. Since receiving Banking on Health training, Edyficar has grown its health portfolio by 75 percent, disbursing more than $1 million in new health-sector loans.
• In Romania, one of the commercial banks that Banyan Global is working with launched a major initiative in the health sector, that includes six specialized health-sector branches and a dedicated sales force of 80 new employees to market new health-sector financial products nationwide.
• In Nigeria, Banyan Global is strengthening the government's new national health insurance scheme by expanding access to financing for private providers that are contracting with health maintenance organizations under a capitated plan.