Medical Credit Fund raises €32.5m to invest in African healthcare
Medical Credit Fund (MCF), the only debt fund fully dedicated to the African health sector, today announced the completion of a €32.5 million fundraise of its second fund (MCF II). This financing round will expand the fund’s presence and support to healthcare providers in sub-Saharan Africa, with a focus on primary healthcare services including malaria prevention and treatment and maternal and childcare. The round also caters for expanding its fully digital loan product called ‘Cash Advance’, which grew exponentially in the past two years.
The funding round was anchored by the Dutch Ministry of Foreign Affairs, which provided the first equity injection of €7.5 million in January this year, to cater to the demand for loans during the heights of the Covid-19 crisis. Also participating in this funding round are CDC Group (€10 million), FMO (€7.5 million), Swedfund (€5 million) and Philips (€2.5 million). In addition, MCF will benefit from a guarantee facility by the U.S. International Development Finance Corporation (DFC), which was initiated by the Health Finance Coalition (HFC) with support of the U.S. President’s Malaria Initiative (PMI) and USAID’s Center for Innovation & Impact (CII). Through blended finance, MCF uses catalytic capital from both public and private sources and is targeting to grow to €80 million in the next few years.
Arjan Poels, managing director of MCF commented on today’s news, “I am very grateful for the support we received from our investors, especially the Dutch Ministry of Foreign Affairs. The funds will help to bridge the financing gap for small and medium-sized health businesses, allowing entrepreneurs to finance construction work, purchase equipment, and prevent medicine stock-outs. Mitigating the chronic underfunding of the sector means more patients can receive better healthcare.”
Clarisa De Franco, managing director and head of private equity funds at CDC Group said, “Affordable, reliable and quality health care has never been more crucial than it is today. Which is why CDC is thrilled to be deepening its partnership with MCF, an impact-led fund manager with a track record of supporting the primary healthcare sector in Africa. Our commitment to MCF II will enable the fund to increase its flexible finance offers to an estimate of over 2,500 healthcare SMEs, bolstering their ability to meet the increased demand for quality healthcare and to serve approximately 10 million patients by 2030. Strengthening Africa’s healthcare system is an immediate priority that demands dedicated healthcare financing to help close the funding gap in the market. CDC’s commitment alongside partner investors will serve the dual purpose of boosting the growth of Africa’s healthcare sector and it will act as a positive signal to the market, attracting even greater investments to scale inclusive quality healthcare for millions of people across Africa.”
Marnix Monsfort, director of financial institutions at FMO added, “We’re pleased to have contributed to this one-of-a-kind fund targeting healthcare SMEs through our Building Prospects and MASSIF funds in the form of a subordinated debt facility. As the fund is aimed at reducing inequalities in several of our core markets, with a strong gender focus, we believe the fund is uniquely positioned to play a leading role in the healthcare space and are proud to have been one of the investors for the launch of the second fund.”
Clifford Chance LLP advised on the legal and tax aspects of the establishment of MCF II.
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