Health sector tipped on acquisition of credit

According to Evelyn Gitonga the director for East Africa, Medical Credit Fund said that the medical sector poses a high risk for financial institutions to lend credit because for starters the patients are not guaranteed.

This is in addition to the fact that there is no guarantee that when a hospital gets a loan to buy medical equipment, it will get returns because there is a cost to maintaining the equipment.

It is because of this that health business owners should understand the difference between a cost and an investment prior to requesting for a loan from banks.

"I have seen doctors who take overdrafts to build a hospital for one year but after one year you will actually not have money to pay the bank and at the end of the day they will respond by selling your structure," she said.

Gitonga therefore advised players in the sector to tailor their grace period on loans to the duration they will take to get returns on their investments. She also advised players to measure their investments against what matches their needs and the needs of their clients.

"Do not bring services which patients will not afford to use and do not bring equipment that is highly specialized such that you need to look for some run to run it," she said.

Gitonga was speaking during the third health business event organized by the Uganda Healthcare Federation (UHF) and Swecare Foundation from Sweden held at Golf Course Hotel recently.

She noted that loans are not the only way to mobilise capital, business owners can use retained earnings, equity injection and term loans.

Dr. Nathan Kenya-Mugisha the chairman Board of Trustees at UHF urged private sector players in health business to network and partner with companies from various countries to devise solutions to problems in the health sector.

"The private sector provides more than 60 percent of services and human resource development in health. However it cannot offer all solutions to Uganda's challenges in the sector so we have to look for those people with solutions," he said.

The event also showcased medical innovations from European countries like Finland and Estonia and Sweden. Innovations included; tronometers - specialised instruments for measuring, monitoring and screening in Glaucoma and Bactiguard an infection protection solution.