Following increasing demand for health services, including diagnostic treatment and care, which presents a growing and untapped opportunity in Nigeria’s health sector, analysts have called for a special banking initiative with low interest rate and spaced out repayment plan that will encourage investors coming into the sector.
With the private health sector becoming patients’ preferred choice due to greater accessibility, higher perceived quality of service, continuity of care it offers and availability of drugs, the current double digit interest rate by banks for loan facilities, analysts say, is high and a dissentive to ensure a Return on Investment (ROI).
Dr. Femi Olugbile, immediate past Permanent Secretary, Lagos State Ministry of Health disclosed that the private sector contribute over 60 percent of health care services with the multi-billion dollar industry continually experiencing growth, driven by national economic development, rising consumer incomes and corresponding ability to pay for healthcare.
Although investors may seek to invest in the sector, Dr. Olugbile noted that a number of factors constrain investment and increase their perception of risk. According to Olugbile, many financial institutions have not invested in the health sector due to limited information on size of the market, its financing needs, risks, opportunities, and trends.
“Many investors complain about the type of collateral that health service providers’ offer, including facilities and specialised medical equipment. Due to the nature of the business, many health service providers require longer term investments, particularly in the case of equity or project financing for larger organisations such as hospitals” Olugbile stated.
Dr. Sunny Kuku, Chairman, EkoCorp Hospital, pointed out that loan facilities from financial institutions with short repayment plan is inimical to investors as healthcare investment globally is often long-term.
Kuku noted that as the government has been proactive in meeting the needs of sectors like Agriculture and Aviation with intervention fund, it has not extended the gesture to the health sector.
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