CBN Raises Healthcare Fund To N200bn
Healthcare providers, hospitals, and pharmaceuticals are to benefit in the expansion of the healthcare sector intervention fund from N100 billion to N200 billion by the Central Bank of Nigeria (CBN).
The expansion was recommended by the Monetary Policy Committee (MPC).
CBN Governor Godwin Emefiele broke the news at the weekend during the opening of Duchess International Hospital in Ikeja, Lagos.
He said local pharmaceutical companies and healthcare practitioners willing to expand or build their capacities will continue to benefit from the fund.
Emefiele said the fund would help in cushioning the impact of the Coronavirus (COVID-19) pandemic on the economy and healthcare providers as well as ensuring that the health sector meets potential increase in demand for healthcare products and services.
He said the scheme aims at increasing private and public investment in the healthcare sector, facilitating improvement in delivery, and reducing medical tourism.
The CBN added that the objective of the scheme is to provide long-term low-cost finance for healthcare development that would lead to the evolvement of world-class healthcare facilities in the country.
Other eligible participants under the scheme are drug and medical equipment manufacturers; healthcare service providers/medical facilities – hospitals/clinics, diagnostic centres/ laboratories, fitness and wellness centres, rehabilitation centres, dialysis centres, blood banks, among others.
Also targeted as beneficiaries are pharmaceutical/medical products and logistic service providers, and other human healthcare service providers as may be determined by the CBN from time to time.
The scheme also has a mandate to improve access to affordable credit by indigenous pharmaceutical companies so as to expand their operations and comply with World Health Organisation (WHO)-stipulated standard in manufacturing.
Emefiele said supporting the healthcare sector remains one of the apex bank’s priorities as it will drastically free over $1 billion spent annually on medical tourism for other developmental projects and funding for key infrastructure. He added that medical tourism puts a huge strain on Nigeria’s foreign reserves.
He called on private sector operators to invest in medical facilities to improve access to healthcare in the country.
His words: “Medical tourism puts a huge strain on our foreign reserves, and more importantly, for every $1 billion allocated to medical treatment abroad, there is less than $1 billion that could be available to other critical sectors of our economy.”
The CBN governor said the MPC recognised the importance of its interventions in the manufacturing sector as well as to give support to the medical sector.
“When we started COVID-19 intervention initiatives, the CBN set aside N100 billion to support the healthcare sector, but upon the rise in demand, we have disbursed N107.7 billion, supporting 114 healthcare projects which include medical diagnostics, pharmaceuticals, dental services, eye clinics both private and public hospital – just to mention a few,” he said.
The CBN guideline for the healthcare funds set an N2 billion maximum borrowing limit for each healthcare provider seeking a loan from the N100 billion funding support.
Also, working capital loans shall be considered based on 20 percent of the average of three years of the proposed borrower’s turnover, subject to a maximum of N500 million per obligor.
The apex bank also set the exit date for all the facilities under the scheme for December 31, 2030, and stipulated joint monitoring of financed activities by the CBN and participating financial institutions.
Emefiele said: “Term loan shall have a maximum tenor of not more ten 10 years with a maximum of a one-year moratorium on repayment. In terms of construction, the tenor shall be determined by the completion date.
“The modalities require that a corporate entity submits its application to a participating financial institution of its choice with a bankable business plan. The participating financial institution shall appraise and conduct due diligence on the application.
“Upon approval by the participating financial institution’s Credit Committee, the application shall be submitted to the CBN with relevant documents attached. The CBN will process and disburse funds to the participating financial institution for onward release to the project.”