Cash Advance: Leveraging mobile to provide loans and technical support to African health SMEs

Governments have a responsibility to ensure that all citizens have access to accessible, affordable, equitable and quality health care. However, in many low and middle-income countries, governments have limited capabilities. The private sector therefore plays an important role by complementing the public provision of health care. Digital technologies are helping private health providers to meet their financing needs, improve their business and contribute to providing quality health care for all.



Recent years have seen increased governmental commitment for universal health coverage (UHC) through policy and financing reforms, with many African governments having (marginally) increased their health spending as a percentage of overall spending. This increase, however, remains inadequate and in most countries falls far below the 15 per cent target agreed at the Abuja Declaration in 2001. Poor management and leakage further diminishes resources for health, thus increasing out of pocket costs and creating an inequitable system wherein only the rich can afford to pay for care.


With public health services often inaccessible, understaffed or lacking sufficient quality, many people turn to the private sector to access health care, often paying out of pocket. In sub-Saharan Africa, about 50 per cent of health care is delivered through the private sector, with private facilities being the first call for high and low-income families. It is now clear that UHC will only be possible by strengthening and improving both public and private health sectors, and through public-private partnerships.


The term private sector in this context, is broad and should not be misconstrued to mean, expensive and profit-driven. “Private sector” includes all health providers not owned or directly controlled by the government. This is diverse and includes profit and not-for-profit, formal and informal, domestic and international. Across Africa, healthcare products and services are delivered through a range of private providers such as maternal homes,
pharmacy shops, dispensaries and primary health centers. This also includes social enterprises, NGOs and faith-based institutions such as those taking part in the Christian Social Services Commission (CSSC) in Tanzania
6or the Christian Health Association of Ghana (CHAG). Despite their crucial role, private health sectors in Africa remain weakly regulated, and highly fragmented. Clinics and small healthcare businesses are seen as ‘risky
investments’ by local banks and therefore struggle to access capital needed to improve their services and grow their businesses.


As part of the PharmAccess Group, the Medical Credit Fund (MCF)  was set up in 2009 to help address these issues, driving more financing and support into the health sector. MCF is the only fund dedicated to financing health SMEs (small and medium enterprises) in Africa, enabling them to access the capital and technical assistance needed to improve quality of care and expand their businesses. Through a blended finance structure, MCF provides flexible, affordable loans to health SMEs and quality improvement support through the internationally accredited quality improvement program, SafeCare.


Over 1,800 health SMEs have used MCF across Africa, mainly in Kenya, Tanzania, Nigeria, Ghana and Uganda. So far, US$ 140 million has been disbursed in loans to healthcare providers, ranging from primary health centers to maternity homes, dispensaries and smaller hospitals, and suppliers to the health sector. The high loan repayment rate of 94 per cent (97 per cent before COVID-19) proves that investing in quality healthcare is not risky, and shows that the African health sector is bankable. Thus, stimulating further health sector investments and growth, while supporting clinics to improve the quality of care they provide for their patients.


The widespread mobile and digital adoption in African countries now brings opportunities to leapfrog healthcare financing and delivery. This has brought a growing local demand for digital lending tools, which MCF answered in 2017 with the launch of ‘Cash Advance’. In Kenya, the advanced mobile money ecosystem (M-Pesa) offered a gateway to roll-out this digital loan product with key implementing partners Safaricom (telco), CarePay (technology company), and in consultation with healthcare providers. Since then, MCF’s digital lending has grown in popularity, with around US$ 50 million dispersed so far.


By integrating into the thriving mobile money ecosystem, Cash Advance allows small and remote healthcare providers to easily access working capital loans using their mobile phone. It has grown in popularity due to its flexible and convenient nature, and short processing time (less than 24 hours). Repayment is based on actual mobile money revenues and no collateral is required. Cash Advance was developed in collaboration with users, and 70 per cent of users are repeat customers.


Digital lending through Cash Advance has proven crucial during the pandemic, with COVID-19 increasing mobile money use and reducing banks’ appetite for SME lending. Small and remote clinics risked closure and could not access banks loans to cover cash flow gaps or buy personal protective equipment (PPEs). Cash Advance offered the solution due to its convenient and flexible nature, disbursing US$ 22 million in 2020 alone.


Beyond the pandemic, MCF and partners will continue to scale digital lending to the health sector. With demand soaring in Africa, digital tools like Cash Advance will be integrated into countries’ broader mobile and digital health ecosystems, supporting sustainable social and economic development.


For sustainability, African governments must ensure that health services are accessible and of good quality, and finance basic health insurance for all, especially for those who cannot afford it. Yet these efforts need to be supplemented and complemented by a well-monitored and incentivised private sector. In this regard, MCF, together with SafeCare and partners are playing a key role in the journey towards UHC, with mobile tools like Cash Advance helping to accelerate progress. The innovation recently won the Finance for the Future Awards, recognizing its sustainable contribution and impact towards health system strengthening.


At the recent launch  of MCF2 in July, 2021, the Managing Director of MCF, Arjan Poels, said:


“Many health SMEs have poor infrastructure and equipment because of limited access to capital. This affects the quality of care they offer to patients who visit their facilities. The COVID-19 pandemic has clearly demonstrated the importance of well-functioning health systems. MCF2 is geared towards driving equitable and quality health care by supporting health care clinics to improve the health care they deliver.”


During the same event, his Excellency Maarten Brouwer, Ambassador, Embassy of the Kingdom of the Netherlands in Kenya said:


“Health and development are closely intertwined. Driving the attainment of Universal Health Coverage will ensure that all people, regardless of their social status, can access quality healthcare services. The vision of Medical Credit Fund aligns with our resolve to empower healthcare facilities to offer quality care to all.”






For further information, please contact Liam Aru Levy Philipp, Advocacy Officer, PharmAccess Group [email protected]