Nigeria’s health sector needs more investment, but for the thousands of hospitals, clinics, pharmacies and diagnostic centres that deliver care every day, the challenge is not simply whether capital exists, but whether viable providers can access financing that is affordable, appropriately structured and aligned with the realities of healthcare businesses.
As new healthcare financing initiatives emerge, the test is now whether capital moves beyond the largest and most established providers to reach viable small businesses, strengthen their capacity and, ultimately, translate capital into better healthcare outcomes for Nigerians.
That question is becoming more urgent as new pools of capital begin to emerge. The Federal Ministry of Health and Social Welfare and FCMB have announced a ₦20 billion financing initiative for the health sector. The Bank of Industry’s Guaranteed Loans for Women (GLOW) programme offers another opportunity, with an initial ₦10 billion funding pool and financing at 7% all-inclusive annual interest, alongside a credit-guarantee mechanism through the National Credit Guarantee Company (NCGC).
These developments suggest that the conversation is beginning to move beyond the familiar question of whether healthcare deserves more financing to the more difficult question of how that financing should reach the businesses that deliver care. Because in healthcare, the size of the cheque does not necessarily tell much about the scale of the impact.
Nigeria’s private health sector is largely made up of small and medium-sized enterprises, including hospitals, clinics, pharmacies, diagnostic centres and laboratories, which together provide a significant share of the healthcare Nigerians access every day. The Nigeria Private Health Sector Market Outlook 2026, launched by the Healthcare Federation of Nigeria (HFN), highlights why financing these businesses cannot be treated as a peripheral SME issue.
The economics of conventional lending help explain the gap. For a financial institution, lending ₦1 billion to one established healthcare business can be simpler and less costly to manage than lending ₦20 million each to 50 smaller providers, because every borrower requires separate assessment, documentation and monitoring. Larger businesses may also be easier to finance because they tend to have stronger financial records, longer operating histories and more substantial collateral.
But what is efficient for a lender is not necessarily what is most important for the health system. The neighbourhood hospital seeking an ultrasound machine, the diagnostic centre replacing ageing equipment or the community pharmacy requiring working capital may not constitute headline investments, but collectively they form much of the infrastructure through which Nigerians encounter healthcare.
This is why the success of healthcare financing should not be judged by the amount of money committed alone. It should be judged by whether that capital reaches viable providers, enables them to expand capacity and improve quality, and ultimately increases the availability of reliable care. Even then, reaching the provider is only half the equation. The structure and terms on which that capital arrives can determine whether it strengthens a business or simply adds another financial burden.
Healthcare is capital intensive, and investments in equipment, facilities and service expansion can take years to generate adequate returns. High commercial rates and short repayment schedules can leave providers servicing debt long before an investment has generated sufficient revenue.
Nigeria therefore needs financing that reflects the economics of healthcare. A dedicated Health Sector Intervention Fund with a specific window for healthcare SMEs could provide single-digit, longer-tenor financing, supported by government and development finance resources and deployed through qualified financial institutions.
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From viable to investable
Credit guarantees, interest support and technical-assistance facilities could help absorb some of the initial risks that commercial lenders are unwilling to take. But the objective should not be permanent subsidised lending; public and development finance should help demonstrate that healthcare SMEs can be financed successfully and create the conditions for commercial capital to follow.
That is important because a healthcare enterprise can receive capital and still remain structurally fragile. A hospital may have strong patient volumes but weak financial records; a diagnostic centre may purchase equipment without sufficient utilisation to justify the investment; a pharmacy may expand its inventory while tying up working capital in slow-moving products.
For financiers, this means looking beyond turnover to understand cash collection, asset utilisation, payer concentration and debt-service capacity. It also means distinguishing genuine business risk, such as regulatory, foreign-exchange or reimbursement risk, from information gaps caused by weak accounting, reporting or management systems.
This is where experience from initiatives such as the Medical Credit Fund (MCF) is instructive. Financing works better when it is accompanied by support that strengthens financial management, governance, business planning, quality improvement and operational performance, helping providers become more investable and better able to use capital effectively.
“Nigeria also needs a clearer financing pathway as businesses grow. Early-stage enterprises may need catalytic funding to validate a model, growing providers may require equipment finance or working capital, while established businesses may become suitable for commercial debt, equity or growth investment.”
Building a healthcare investment ecosystem
It also requires a broader understanding of what healthcare growth looks like. Scale is not always another building or more beds; diagnostic networks, shared laboratory infrastructure, digital clinical services, procurement platforms and technology-enabled models can expand access without reproducing the same capital-intensive facility model.
The financing ecosystem must also extend beyond providers to the businesses that keep healthcare functioning. Medical distributors, equipment-maintenance companies, pharmaceutical wholesalers, cold-chain operators and health-technology businesses face their own working-capital constraints, and weaknesses in these businesses can ultimately disrupt the services of healthcare facilities.
This makes healthcare financing an ecosystem challenge, not simply a question of lending to hospitals and pharmacies. Industry associations such as HFN can help make that market more legible by connecting providers to financing opportunities and requirements while helping financial institutions better understand healthcare business models, risks and opportunities.
Predictable revenue is another critical part of that equation. A provider that can rely on predictable payments is in a stronger position to borrow, invest and plan than one dependent largely on irregular out-of-pocket payments, making health insurance and strategic purchasing relevant not only to Universal Health Coverage but also to the bankability of healthcare businesses.
Nigeria also needs a clearer financing pathway as businesses grow. Early-stage enterprises may need catalytic funding to validate a model, growing providers may require equipment finance or working capital, while established businesses may become suitable for commercial debt, equity or growth investment.
Without such a progression, businesses can outgrow one source of capital before becoming sufficiently structured to access the next. The goal should be a financing ecosystem in which public and development capital helps reduce early risks, better data and governance improve investability, and commercial capital increasingly follows as the market becomes easier to understand and finance.
From financing programmes to market-making
Ultimately, the question is not simply how much money Nigeria can commit to healthcare. It is whether the country can create the conditions under which healthcare becomes increasingly investable.
That requires better sector data, stronger provider governance, predictable payment systems, appropriate financing products and credible risk-sharing mechanisms. It also requires recognising the private health sector as an interconnected economic system involving providers, entrepreneurs, financiers, insurers, suppliers, technology companies and patients.
The immediate challenge is to move from announcing financing to making it usable. What does a small hospital need to qualify? What will a lender expect from a community pharmacy or diagnostic centre? How does a clinically viable business become investment-ready? These are among the practical questions the HFN Women’s Forum Webinar (scheduled for August 20th) on access to finance for healthcare businesses will address.
The goal is not simply to finance more healthcare businesses. It is to build a healthcare market in which more viable businesses can become investable, more capital can follow and investment can compound into stronger healthcare delivery.
This article is a partnership between the Healthcare Federation of Nigeria (HFN) and BusinessDay to highlight policies and initiatives that can strengthen Nigeria’s health sector. As a private sector-led coalition, HFN advocates for policies and partnerships that improve healthcare delivery and create a stronger environment for private sector participation. This partnership aims to contribute to informed public discourse and advance practical solutions for Nigeria’s health sector.
Njide Ndili, President, Healthcare Federation of Nigeria (HFN), and Country Director, PharmAccess Nigeria;
Dr Mories Atoki, HFN member and CEO, ABCHealth, a not-for-profit organisation founded by the Aliko Dangote Foundation and Aigboje Aig-Imoukhuede to mobilise the private sector to advance health outcomes across Africa;
Mr Wale Olajubu, Executive Director, Health Business Academy (HBA).
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