Scaling-up High Impact Healthcare Solutions
Launch Year: 2020
Instrument(s): Concessional Funding, Partial Risk Guarantee, Returnable Grants, Social Success Notes, Interest Subvention, Results Based Financing for market expansion, Viability Gap Funding & Bridge Funding
Target Geography(s): India
Target Sector(s): Healthcare
Target Financial Size:USD 250+ Million
Key Stakeholder(s) + Role(s):
- Philanthropic Donor - United States Agency for International Development | The Rockefeller Foundation
- Fund Hosting Entity - Indian Institute of Technology, Delhi
- Technical Support Unit - IPE Global
- Technical Partners - Atal Innovation Mission, NITI Aayog | National Health Authority | Principal Scientific Advisor to the Government of India | NATHEALTH
- Debt Financing Partner - Axis Bank | IndusInd Bank | Caspian Debt
Executive Summary
Against the backdrop of insufficient budgetary allocation for health spending, India faces a long-standing challenge of weak health systems with persistent shortage of skilled workforce as well as inefficient and inadequate infrastructure. The COVID-19 crisis exacerbated these difficulties placing impetus on private investments and market-based health solutions. Several business models and new-age solutions emerged during the pandemic, offering unique propositions to address complex healthcare challenges. However, despite their promise to bridge the gaps in health systems, these enterprises mostly struggle to scale-up and deliver sustainable impact. They face numerous hurdles, ranging from insufficient access to affordable capital and markets, regulatory roadblocks to market inefficiencies.
Recognizing these gaps, SAMRIDH, supported by USAID and implemented by IPE Global, was initiated amidst the pandemic to drive greater investments in enterprises to scale-up high impact health solutions. Within two years of setting up, SAMRIDH has established high-level multi-sectoral partnerships with apex government bodies, development agencies, philanthropies, financial institutions, industry associations and academia. Today, SAMRIDH is a $250 million healthcare blended finance facility, mobilizing affordable capital for healthcare enterprises in the form of grants, equity, debt, and other financial structures. In addition, it adopts a "capital plus" approach and provides business advisory services and mentorship for process and product improvements, to ensure financial viability and sustainability of health solutions.
SAMRIDH was set out with an immediate goal to bridge the supply-side gaps in emergency health services and accelerate India's response to COVID-19. However, in long-term, it aims to strengthen comprehensive health services to improve access to affordable and quality healthcare for vulnerable communities and build resilient health systems to effectively respond to future health emergencies.
Financial Structure
SAMRIDH combines commercial capital with public and philanthropic funds to mitigate barriers to private investment in healthcare. To execute these "blended" transactions, its financial structure consists of two pools of capital - grant pool and debt pool. The 'grant pool' is housed under IIT Delhi, recognized as an Institute of Eminence by the Government of India. The 'debt pool' comprises of commitments by financial institutions.
The funds are mobilized to healthcare businesses through blended finance solutions, wherein the philanthropic capital or 'Grant pool' is used to secure/de-risk commercial/debt investments and provide quick and low-collateral blended loans. The two pools of capital are managed by a Technical Support Unit (TSU) housed at IPE Global. The TSU manages the grant pool, and facilitate debt capital through its partner lending institutions, which provides debt as per their respective rules and procedures.
Key Insights/Learnings
- Templatized models and portfolio level approach are potential pathways to scale blended finance Designing blended finance models are complicated due to their multi-stakeholder nature, fragmented landscape, and inherent complexities in the regulations to create structures that use different sources of capital. This leads to high transaction costs and long timelines in structuring blended solutions. Therefore, having transaction templates that meet regulatory requirements and are assessed for impact and cost-effectiveness can play a significant role in scaling the adoption of blended finance. Moreover, creating portfolio-level structures that can be executed with multiple partners has proven to be time-efficient, allowing multiple transactions to go through a systematic approach.
- Better measurement frameworks can enhance uptake of blended finance in donor community Limitations to demonstrate social impact results has been a key barrier for philanthropies, CSR funds, and family offices to participate in blended finance. To unlock these and new pools of capital, the ecosystem needs to adopt standardized and globally aligned frameworks to strengthen the impact management and measurement practices. This will help communicate the advantages of using blended finance and build greater credibility for the approach.
Impact to Date
- Unlock credit lines of USD 200+ Million through partnerships with leading banks and financial institutions to scale high impact health solutions
- Raised USD 25 Million grant to use as catalytic capital for de-risking commercial investments in healthcare
- Over USD 10+ Million committed from grant pool in 25+ high impact healthcare solutions, across the healthcare landscape including infrastructure, diagnostic products and services, IoT and medical devices, telemedicine, vaccine supply and delivery systems, training and capacity building, Information, Education and Communication (IEC)
- Through the blended financing solutions, SAMRIDH has so far achieved leverage of USD 74 million+ on development funding mobilized from development agencies, philanthropies and corporates
- SAMRIDH has reached out to 1200+ healthcare facilities; 15000+ medical staff, CHWs, nurses and reached 23 million people through its partners.
- Created opportunities for market access, technical collaborations, and fundraising to ensure sustainability of many SAMRIDH supported healthcare businesses