Country Director for PharmAccess Foundation, Njide Ndili, has explained the reason why commercial banks usually decline loan applications from healthcare facilities, as well as provided a solution to that problem.
According to Ndili, commercial banks shy away from giving loans to healthcare businesses because they believe that such businesses may be unable to pay and it would be unethical to shut them down, thus putting the banks at a loss.
“A lot of banks don’t understand the healthcare business. The impression now is that if you finance a healthcare business or hospital and they are not able to pay, you don’t have any collateral to hold on to. And it is not appropriate to lock up the business. So, because they don’t understand it they don’t give a lot of loans. They are looking for quick turnaround. Like the traders and others but when it comes to healthcare the loans are very low.” Ndili said.
However, she also proffered a solution to the problem as she said PharmAccess Foundation was determined to correct the wrong impression and help both banks and healthcare businesses improve on both sides of the deal.
“We want to help them on what the business does. We help banks understand healthcare organisation function. On the hospitals’ sides, we help train them on how to keep financial records. A lot of hospitals do not have audited statement of account; we help to build that capacity. It is a whole lot of activities to de-risk the market,” Guardian quotes Ndili as saying.
In this vein, she announced that Nigeria was now a beneficiary from a special fund, the Medical Credit Fund (MCF) initiative, which is a a multi-million dollar initiative of PharmAccess International for African countries, offers funds to private facilities and medical business at single digit interest rate.
Ndili thus encouraged healthcare businesses to take advantage of the fund which would provide them with better conditions than commercial settings would approve.
Parts of this article originally appeared in Guardian Newspapers.
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