Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact
Although MCF was only established one year ago, and has no long term track record yet, the initial indicators such as uptake of participants in its lending and technical assistance programs, support from domestic stakeholders such as governments and business coalitions and networks in health, and willingness of investors and donors to become involved are quite positive. To date, the first solid partnerships with local banks and technical assistance providers have been established, training modules have been prepared and performance indicators have been installed. So far approximately 50 health SME’s have been selected and the first loans will be provided in the coming months.
The performance of MCF is first of all captured by regular pre-loan performance indicators, such as number of participating clinics enrolled in the MCF program, number of clinics graduated from medical quality and business trainings, number of completed quality upgrade and business plans, number of loan applications submitted and number and volume of loans provided.
Post-loan performance indicators have been grouped in three categories: financial, medical and social performance:
• Financial performance is measured by overall loan portfolio quality indicators as well as by individual clinics’ loan servicing records. Overtime, business performance uptake will show in the audited financial statements of clinics.
• Medical performance will be measured through the application of international standards, as per international medical quality standards (ISQua). This starts with base-line surveys per clinic and afterwards annual independent quality audits will be conducted. The medical performance area will include issuance of branded quality certificates which will boost both patient and investor confidence.
• Social performance will be captured by tracking key (MDG related) public health indicators in the clinics’ catchment areas.
To date, pre loan-methodologies are in place and use already, whereas fine-tuning of financial and medical performance measurement methodologies is nearing completion. Before the end of 2010 a social performance tracking system will be fully operational.
As is common in the health sector, all performance tracking systems will be entirely evidence-based with extensive data-collection. In addition the MCF is working towards a performance presentation facility in the public domain (web-based) to allow for direct access by all stakeholders to latest performance data. This would also allow for public accountability of the MCF program.
How many firms do you expect to reach?
MCF targets TA provision to 50-100 SMEs per country. Expectedly half of those will apply for first loans or 75 to 150 first loans per annum in three countries. Half of the graduates are expected to proceed to second loans: 35-70 per annum at full capacity of the program.
What is the volume of private SME finance you aim to catalyze?
The MCF aims to raise USD 8 million for loan capital and 4 million for technical assistance in the period 2010-2014. Approximately 25% is available already, 25% is under negotiation and 50% is targeted from international investors and 50% thereof through the G-20 Challenge (2M capital and 1M technical assistance).
What time frame will be required to reach these targets?
PharmAccess has financed the first USD 1 million for business development and to start-up the operations for the period 2008-2010. A fund raising campaign has been started to raise USD 4 million on the Dutch private investor market. By early 2011 we expect to have 40% of overall targets committed. The remaining 60% is expected to be secured in 2011 and 2012.
What would prevent your solution from being a success?
Demand for loan capital is very high, but qualified demand is low. It takes time and effort to develop qualified demand and this process needs to be financed on a grant base. Raising support for the technical assistance fund is a critical success factor. Also capital provision to the MCF is of great importance to fuel our loan capital base. MCF relies on investors willing to trade a high financial with a high social return on investments.
MCF is confident that it will manage to grow with current commitments. However, to meet the large demand for its services additional investments and support from the G-20 Challenge will facilitate program acceleration.