Blended Finance for Family Planning: Three Potential Pathways
Blended finance is the strategic use of public and philanthropic resources to mobilize private capital to achieve development outcomes. According to Convergence figures from 2020, $11 billion in blended finance is generated each year to address economic development and social issues such as climate change and access to clean water but only three percent has been used for health and hardly any for family planning.
The returns to society from investments in family planning, however, would be impressive—the World Health Organization estimates a two-fold return in pregnancy-related healthcare costs avoided, a reduction in maternal deaths, and the lives of 1.5 million children under age 5 saved annually. In December 2020, HP+ virtually convened development partners, family planning experts, development finance experts, and impact investors to explore the potential of blended finance for family planning.
The goals for HP+ were:
- Identify market opportunities that can expand the voluntary and affordable use of modern contraception in low- and lower-middle income countries, while generating a viable market return for investors.
- Use the ideas generated at the meeting to document promising blended finance opportunities to guide action.
- Engage participants and other institutions to further define how to enact the opportunities.
A few potential blended finance solution areas came into focus: (1) market introduction/shaping and market access, (2) distribution/point of sale, and (3) new direct-to-consumer technologies.
Specifically, four chief ideas were discussed on how blended finance could be used to advance these solutions. One, using blended finance to both jump-start the introduction of new products and identify products and services that are in demand, but not currently being supplied—a situation referred to as “market opportunities.” Two, using blended finance to expand access to family planning services through non-traditional health sector distribution locations, such as drug shops and pharmacies. Three, spurring innovation for telemedicine offerings and direct-to-consumer delivery—where traditional intermediaries are bypassed in favor of providers dealing directly with consumers (e.g., using courier services to deliver products directly to consumers). Four, improving linkages between private market players in each step of the product development and supply process (i.e., the family planning value chain).
HP+’s task now is to be an enabler for ideas, amplified by further study and research, to enhance the market for blended financing. HP+ also can continue to convene the public sector to provide information to alert investors to opportunities—either to build on what the public sector is doing or to innovate from that.