Exploring the Potential of Blended Financing Initiatives for Health
On November 30, 2021, HP+ hosted an online forum to explore how blended finance can help catalyze commercial engagement in health and the barriers to doing so. Blended finance refers to “the strategic use of development funds, such as those from government aid and philanthropic sources, to mobilize private capital for social and environment results.” Although many innovative blended finance initiatives are in place globally, health-related blended financing solutions account for only a fraction of the overall market, representing a mostly untapped tool for addressing a multitude of healthcare barriers. The webinar featured participants from HP+, USAID, Palladium Impact Capital, Salient Advisory, and Caspian.
During the event, HP+ presented the project’s work to investigate opportunities for leveraging blended finance to increase commercial sector engagement in family planning in India. Presenters noted that, while barriers to accessing or affording financing in the digital healthcare and wholesale/distributor space persist, market insights suggest the potential to overcome those barriers through blending patient or risk tolerant capital and local private investment. Salient Advisory, a healthcare consulting firm, presented their USAID-supported work to examine the potential of blended finance to improve the growth and efficiency of start-ups and distributors in Ghana, Kenya, Nigeria, and Uganda. Salient Advisory presenters concluded that increasing support to early/growth-stage start-ups with small grants could increase their access to loans in local currency, thereby minimizing currency hedging issues and creating scalable risk assessment processes to enable access to financing.
In an open discussion panelists highlighted the need to support different stakeholders, including regulators, investors, and donors, in engaging with blended finance, as they might not always have the experience or tools to do so. Mara Hansen Staples, Salient Advisory’s Founder, remarked, “It is incumbent upon all of us in the development community to go further in taking risks to establish the next generation of financing mechanisms that are required to support local companies to replace all of our jobs in high-income countries. Now is the time to innovate with a high degree of risk, with smart approaches to partnerships, and with a willingness to fail, to meet these entrepreneurs in this moment to develop the next-generation models of care delivery.”