In Africa, Bridging the Financing Gap Between Banks, Clinics

Healthcare Delivery

Above: Ioan Cleaton-Jones—WDI Director, Healthcare Delivery, speaks to an audience participating in the African Medical Equipment Facility (AMEF) program in Côte d’Ivoire.

Medical conditions aren’t limited by borders, but that’s not the case for the equipment to diagnose and treat them. Clinics and medical centers in East and West Africa often struggle to secure funding to bring the large-scale technical tools necessary to serve their communities. Without the backing of a bank loan, expensive equipment, such as MRI and CT scanners, are frequently out of reach. A newly launched program from the International Finance Corporation (IFC), part of the World Bank Group, seeks to bridge this gap.

The Africa Medical Equipment Facility (AMEF), launched by IFC and supported by the government of Norway, is connecting lenders and medical professionals to improve the availability of medical equipment across the continent. It aims to provide security and support for both sides of the interaction, all to ultimately improve healthcare for those living in the region. The program is set on three pillars: financial risk-sharing for banks, training for lenders, and training for leaders of small- and medium-sized enterprises (SMEs) focused on healthcare.

The funding is meant to kickstart essential healthcare investments in the region, while the training for both groups was developed to ensure the process goes smoothly. It’s also where the William Davidson Institute (WDI) at the University of Michigan entered the scene. IFC engaged WDI to deliver AMEF training courses to both client financial institutions and healthcare focused SMEs in Cote d’Ivoire, as well as to provide follow-up coaching support to AMEF trainees.

Alleviating the Risk

With funds from the International Development Association’s Private Sector Window and the Global Financing Facility, IFC is bolstering lenders’ confidence — encouraging them to step into an investment opportunity that may otherwise feel uncertain or risky. In turn, medical clinics and related businesses can apply for loans from $5,000 to $2 million, and the program can support $300 million in financing across the region.

For these loans to be effective, the small healthcare businesses need to meet the lending requirements of the banks and the medical teams. The program seeks to help banks appropriately assess and manage risk and help healthcare organizations to better understand how to procure and finance the medical equipment they need. After both businesses and lenders enter into an agreement, the program provides consulting services to support the businesses through the first few transactions to help them purchase the equipment they need.

Providing a Foundation

The first training programs recently kicked off in Kenya and Côte d’Ivoire. IFC engaged WDI to deliver the training with NSIA Banque in Abidjan, Côte d’Ivoire. Ioan Cleaton-Jones, Director of Healthcare Delivery at WDI, led sessions with lenders and potential borrowers. For banks, he shared a clear methodology for how to evaluate medical equipment financing, covering common medical equipment, principal risks, loan forms, and a case study to apply the knowledge learned. The goal, Cleaton-Jones said, is to increase the bank’s comfort with financing medical equipment purchases, thereby increasing opportunities for financial institutions to finance smaller healthcare businesses.

“If the bank has a better idea how to evaluate risks, they are less afraid to do so, which will help to facilitate lending,” he said.

For healthcare SMEs, the training session introduced the AMEF program and gave an overview of future training sessions, which will cover how to evaluate equipment needs, develop technical specifications for that necessary equipment, solicit bids from potential suppliers and apply for bank financing. While the organizations might understand the ailments their communities are battling, an essential aspect of resolving them is identifying the exact specifications of the equipment needed for diagnosis and treatment. Do they need a 3T or a 1.5T machine when they place an order for an MRI? What equipment is missing from a clinic that could improve its response to COVID-19? Not only did the training cover the financing piece of this puzzle, but it also provided potential borrowers with the framework to make these types of critical determinations around their equipment choices.

Enthusiasm for Solutions

IFC’s goal is to expand the program across the region, into Cameroon, Senegal, Tanzania, Uganda, and Rwanda, and to additional countries after that. Interest and enthusiasm from both banks and SMEs bode well for its plans. In the training sessions that have already occurred, bankers and healthcare professionals shared excitement around the opportunity and sought clarity on the next steps, Cleaton-Jones said. Lenders asked technical questions about approving loan applications, looking for tools and checklists to standardize and distill the review procedures. Potential borrowers, on the other hand, were eagerly searching for loan-specific details. Already facing an immense push for updated and new equipment in their facilities, healthcare leaders asked about interest rates and grace periods. In just a few sessions, Cleaton-Jones saw the tremendous support the facility and training program will provide to participants.

AMEF’s objective is to improve the health sector’s resilience in Africa, and grow the collaboration between healthcare businesses and local banks—and it’s a perfect match for WDI’s support. “This fits really well with WDI’s mission,” said Cleaton-Jones. “It’s training businesspeople. It’s putting the skills for economic success in the hands of business decision-makers.”

About WDI

At the William Davidson Institute at the University of Michigan, unlocking the power of business to provide lasting economic and social prosperity in low- and middle-income countries (LMICs) is in our DNA. We gather the data, develop new models, test concepts and collaborate with partners to find real solutions that lead to new opportunities. This is what we mean by Solving for Business—our calling since the Institute was first founded as an independent nonprofit educational organization in 1992. We believe societies that empower individuals with the tools and skills to excel in business, in turn generate both economic growth and social freedom—or the agency necessary for people to thrive.

Media Contact:

Scott Anderson, WDI Communications Manager

Government health ministries in low- and middle-income countries (LMICs) have historically struggled to adequately fund healthcare services for their citizens. But as these countries transition away from donor funding over the next two decades, many will need to find new domestic revenue streams to finance these services. A new WDI white paper explores the impact of raising additional government revenue through increased tax rates on “bads,” such as tobacco, alcohol and sugary drinks.  

The paper, “Revenue Estimates from Taxing ‘Bads’ in 16 Low- and Middle-Income Countries,” estimates the additional revenue generated in 2016 had higher excise tax rates been imposed on tobacco, alcohol and sugary drinks and then compares this revenue to select national economic indicators. The analysis included 16 low- and middle-income countries: Côte d’Ivoire, Democratic Republic of the Congo, Ethiopia, Haiti, India, Lao People’s Democratic Republic, Moldova, Myanmar, Niger, Papua New Guinea, Rwanda, Senegal, Sierra Leone, Tajikistan, Tanzania and Togo. 

Ben Davis

Ben Davis

“The key finding is that increased excise tax rates that result in only a modest increase in retail price can still generate an important amount of additional revenue relative to current health expenditure,” said Ben Davis, a research manager with WDI’s Healthcare sector.  Davis wrote the paper with Pascale Leroueil, vice president of WDI’s Healthcare sector, and William Savedoff, senior fellow at the Center for Global Development. 

The simulations showed that in 14 of the 16 countries, a tax increasing retail price by 17% could generate additional revenue that is more than 50% of the amount these governments currently spend from their own budgets on healthcare.  For 7 of the 16 countries, additional revenue is more than 100% of that amount. 

Davis emphasized that the study has limitations. For example, estimates do not account for income and cross-substitution effects (or when consumers switch to cheaper alternatives when a product’s price rises), and they are not adjusted based on historical experience in raising tax revenues.  

While the results of the current study are broadly aligned with those recently produced by the Bloomberg Philanthropies’ Task Force on Fiscal Policy for Health, there is a slight difference in methodology. The method used by Davis and his fellow authors allowed them to incorporate several different data sources and calculation methods in the final revenue estimates.  Input data were obtained from public databases, journal articles, and LMIC government websites and then used in either a “bottom up” or a “top down” calculation. The “Bottom up” calculation begins with data showing how often individuals consume tobacco, alcohol and sugary drinks while the “top down” calculation begins with the amount of money actually collected by LMIC governments that taxed these products.  

Davis said these estimates could act as a starting point for a discussion between global donor organizations and country governments. “A government stakeholder might say, ‘These results are interesting.  An increased excise tax on these products might be worth considering. Let’s do a deeper analysis to make sure these numbers reflect reality when we take into account all of the factors that couldn’t be captured in the initial study.’” 

“This paper is a small part of a larger conversation about domestic revenue mobilization and healthcare financing in low- and middle-income countries,” Davis said. “It is a building block.”


This white paper is a modest contribution to the existing body of knowledge on potential revenue benefits from taxation of “bads” in low- and middle-income countries (LMICs).  We seek to provide orders-of-magnitude responses to the questions, “For 16 LMICs, what amount of additional government revenue could have been generated in 2016 if higher excise tax rates had been imposed on tobacco, alcohol, and sugar-sweetened beverages?”, and “How does this additional government revenue compare to select national economic indicators?”.

WDI, in a second phase of support to the SWEDD initiative, drafted a report summarizing the strengths, weaknesses and lessons learned during the execution of the first phase of the initiative’s supply chain activities. The report captured the perspective of stakeholders at all levels of implementation – from donor organizations to independent consultants at the country level. The lessons learned from the execution of the SWEDD supply chain activities were shared with teams at the Global Fund encouraging greater efficacy and efficiency of future, similar country engagements.

The objective of this project was to support the six countries included in the Sahel Women’s Empowerment and Demographic Dividend (SWEDD) initiative to develop technically sound plans for investments to be made in their health supply chains. The SWEDD initiative began as a response to a lack of access to reproductive, child, and maternal health services in the countries of the Sahel region of Africa.

The supply chain component of this initiative focuses on investments in the logistics systems which allow the products needed for reproductive, child, and maternal health services to be made available. WDI provided supply chain expertise to country representatives during the SWEDD supply chain launch meeting, ran in-country workshops alongside local partners to identify health supply chain investment opportunities, and reviewed the final investment plans for each country.

Additionally, WDI developed a report summarizing the strengths, weaknesses, and lessons learned during the execution of the initial phases of SWEDD supply chain activities. As a result of the assistance provided by WDI and other partners, the investment plans for all six SWEDD countries were approved by the World Bank. Furthermore, the lessons learned from the execution of the SWEDD supply chain activities were shared with teams at the Global Fund, encouraging greater efficacy and efficiency of future, similar country engagements.

Back to Top