While it has been a shareholder, Swedfund has assisted the company find the right staff and follow a sustainable path to a continued and swift expansion.
There is a shortage of good, accessible healthcare in East Africa. AAR Healthcare is a private provider investing on a large scale to open more clinics and eventually more hospitals. Over 600,000 patients visit AAR Healthcare’s clinics each year.
Wambui Kamau is a doctor and the manager of a clinic in Thika, northeast of Nairobi, one of 17 private outpatient clinics that the company operates in Kenya. In addition to meeting patients she spends much of her working day on preventive care. The clinic provides advice to patients about how they can best keep themselves healthy.
“The most satisfying part of my job is when I can help my patients with their wellbeing and health, and give them a general experience that makes them smile,” says Wambui Kamau.
Administrative routine are part of the responsibility of managing the clinic. As well as patient contacts, which can mean anything from an emergency visit to following up a chronic illness, Wambui has responsibility for staff at the clinic and its finances.
She is also Quality Assurance Manager for clinical services and patient safety at AAR Healthcare.
“Taking responsibility that both staff and shareholders are satisfied is just one of many challenges in my job. Getting the medical supplies we need is not always easy, either. It’s also a challenge to deal with patients’ complaints – both perceived mistakes and real ones,” she says.
AAR Healthcaare serves the growing African middle class. Seeing a doctor at one of AAR Healthcare’s clinics costs money, but the basic idea is to offer medical care of good quality at a reasonable cost. The company began business on a small scale in 1984 and today has 39 primary care clinics, 12 ambulances and a hospital in Uganda. There are around 1,000 employees. Swedfund became a shareholder in 2013.
“There is a shortage of medical care in East Africa, which means that all opportunities to provide care are good,” says Henrik Nordlander, Senior Investment Manager at Swedfund.
During the two and a half years Swedfund has been a shareholder the company has expanded rapidly. Before Swedfund invested, the company had already been split into two separate businesses, one for the insurance and one for healthcare. This improved efficiency and increased the rate of expansion to the level advocated by the owners and the board. When it came onboard, Swedfund also participated in the recruitment of the CEO and at a later stage of a CFO to enhance professionalism and improve the governance of the company. Swedfund’s main impact is through its board representation.
“We request correct and well prepared board documentation for well informed decisions, and we make it clear that we will follow up on approvals. That in turn creates a responsibility and procedures that provide security for the company as a whole, its management, employees, customers and suppliers, as well as for investors. Many stakeholders appreciate for the same reasons that there is a Development Finance Institution such as Swedfund among shareholders and represented on the board. It indicates that the company is transparent and some consider it to be an unofficial guarantee that the company is well managed,” says Henrik Nordlander.
“There are several advantages of having a DFI such as Swedfund as a partner,” says Dr Wambui Kamau. “It has created more jobs and better career opportunities for staff. This type of enterprise is sustainable and spurs economic growth. Poverty is declining, the average income is increasing and we are also reducing our dependency on aid”.
This is how Swedfund works with financial viability
AAR Healthcare has received help to introduce a system for evaluating establishments of new healthcare clinics. Now, prior to making a decision about starting up a new clinic they have processes to assess areas such as brand building, customer data and average incomes among local residents, constructions costs and the level of competition.