With just 11 percent of the world’s population but a whopping 24 percent of the global disease burden, improving health outcomes in sub-Saharan Africa is a major challenge. There is increasing recognition that the private sector has an enormous role to play in addressing this challenge, especially for the poor.
Fifty percent of the $16.7 billion that consumers spent on health care in 2005 went to private providers. And almost half of health care consumers in the lowest income quintiles in Ethiopia and Kenya receive care from private, revenue-generating providers. Supporting these health providers is critical to addressing health challenges in these regions.
Many of these health enterprises have capital and technical assistance requirements that are not easily met by existing micro-financing, commercial capital or impact investments. The challenge of finding the right kind of capital at the right point in an enterprise’s development has been referred to as the “missing middle” (see this article by Jenny Everett of the Aspen Network of Development Entrepreneurs and this one by Logan Yonavjak of New Ventures for more on this subject). These enterprises also need the opportunity to experiment so they can understand which innovations work, how their business models scale, and how to create markets for their services. For enterprises delivering health care services to the poor, these experiments are potentially costly. As explored in the Monitor report, From Blueprint to Scale, there is still a significant role for philanthropy in impact investing and plenty of room for innovation.
Last week, the USAID-funded Strengthening Health Outcomes through the Private Sector (SHOPS) project announced the launch of the Health Enterprise Fund, a challenge fund designed to address the lack of available capital for health enterprises in sub-Saharan Africa. The fund will support innovative health enterprises serving BoP populations in Ethiopia and Kenya that demonstrate the potential for sustainability, scale, and replication. This support will include substantial technical assistance and grant funding of up to $200,000 per awardee. The goal of the Health Enterprise Fund is to bridge the missing middle and help awardees develop to the point where they become attractive to impact investors, or are able to benefit from commercial sources of capital.
The Health Enterprise Fund is currently seeking applications from revenue-generating enterprises that have developed low-cost health care delivery approaches in one or more of the following health areas: family planning, reproductive health, maternal and child health, or HIV/AIDS. Enterprises that indirectly contribute to improved health—through sectors like health financing, health systems strengthening, human resources, information and communication technology, and supply chain management—will also be considered.
Initial applications are due by March 8, 2013. Finalists will be invited to develop a full proposal, and to pitch their idea to the selection committee at an event in Nairobi in early May 2013. Awardees will be provided with technical assistance and monitoring and evaluation support through September 2014.
Over the coming months, we will profile some of the new business models, technologies and partnerships supported by the Health Enterprise Fund to improve health outcomes in sub-Saharan Africa.
Learn more about the Health Enterprise Fund here. If you have any questions, email firstname.lastname@example.org, and be sure to follow us on Twitter at @Health_Ent_Fund.