KENYA – Co-operative Bank of Kenya (Co-op Bank), a commercial bank, has partnered with the International Finance Corporation (IFC), a member of the World Bank, to offer loans to healthcare businesses at more favourable terms.
The businesses including clinics, hospitals and laboratories with a maximum of 300 employees will access up to 90 percent asset financing of up to KSh200 million (US$ 1.76m).
The deal signed under IFC’s Africa Medical Equipment Facility seeks to offer the small and medium-sized healthcare businesses local currency loans for purchase or lease of medical equipment.
“The post-pandemic recovery needs to be supported at all levels within the health sector,” said Amena Arif, IFC Country Manager for Kenya during the launch of a small business training programme under Medical Equipment Facility.
The financed asset will be the primary security and all risk insurance cover will be provided through Co-op Bank Bancassurance.
The repayment period for loans accessed under the scheme extends to 60 months as opposed to the usual 36 months, while the interest rate is at 10 percent compared to the banking industry’s average of 12.1 percent.
Under the scheme, the global financier has also partnered with original equipment manufacturers and the Kenya Healthcare Federation to provide training on purchase of vital medical equipment for the businesses.
Training of the healthcare SMEs will enable them to navigate the planning, budgeting and procurement process to access advanced medical equipment they need to serve patients. The training program is supported by the Government of Norway.
Finnfund opens office in Nairobi
This comes as Finland’s sovereign wealth company Finnfund has opened a regional office in Nairobi seeking to expand its portfolio in the local market where it has already made several investments.
The fund usually invests between US$227.8million (KSh25.9 billion) to US$284.97 million (KSh32.4 billion) in 20 to 30 companies throughout developing countries.
“Africa is the place to be for European development financiers. It is a continent where jobs and investments are very much needed, and at the same time, it is the new frontier, where opportunities are abounded, and life is getting better for millions of people,” Finnfund chief executive officer Jaakko Kangasniemi said in a statement.
“Some of our best and most impactful investments are in East Africa, and we intend to make many more such investments in the coming years.”
The fund will deploy two to three investment professionals at the Nairobi office to scout for opportunities.
Finnfund has invested billions of shillings in 17 companies operating in Kenya including Elgon Road Developments, Penda Health, Sanergy Inc, and Lake Turkana Wind Power.
Finnfund follows other sovereign wealth funds in setting up a regional office in Nairobi. Others include Proparco (French), DEG (German), CDC (UK) and FMO (Dutch).
The funds, which describe themselves as development finance institutions, are the biggest foreign investors in the country focusing on private companies.