Healthcare reforms and rapid demographic change in the region puts spotlights on private sector health care providers

As governmental expenditure in the sector is being scaled down for decentralising and modernising healthcare administration, there is an immediate need for existing facilities to be bolstered respecting local cultural and religious nuances, to create a healthcare network that meets the growing demand for affordable, specialized and high-quality healthcare services.

Hussein Rifai, Chief Executive Officer, Injazat Capital said, "Healthcare delivery in the MENA region is at a transitional stage. As governments push forward with the reforms, immense opportunities and formidable challenges arises in the delivery of quality healthcare services. Demographic changes, increased urbanisation and the resultant breakout of endemic diseases calls for a unique participatory approach for the delivery of a unified region-wide healthcare mechanism by bolstering existing as well as new facilities, while at the same time respecting the ethical, traditional and religious codes in the region."

"The Shefa Healthcare fund, which is a US$ 100 million Shari'a complaint venture, is designed to invest in healthcare providers and ancillary services in the Middle East and North Africa (MENA) region, with the objective of creating industry-dominant health groups with regional reach," he added.

The private health service providers are driving spending in the sector. Total health care expenditure in the MENA region based on the percentage of GDP stands less than 6 per cent, below the world average. The private sector contributions to the total healthcare spend stands at 48 per cent. In the GCC region, the private sectors' spend in the sector accounts for 24 per cent.

"In the coming years, this is set to increase," said Rifai. "Various factors such as the implementation of mandatory medical insurance, governmental initiatives to privatize the sector, increased participation of insurance companies in financing healthcare activities, creation of specialised units to treat specific medical conditions, and the growth in demand due to rapid demographic changes, would train the spot light on the private sector, on their ability to adapt and deliver."

"Our objective is to provide principled guidance for the industry to be acclimatised to these changes by adopting best practices, breakthrough technologies and innovations radically altering conventional methods of medical services provision in the region. Shefa Healthcare Fund is resolved to make judicious investments in the Middle East medical sector in accordance with Islamic principles, while at the same time hedging investor risk through creating opportunities for capital appreciation," he concludes.

The Shefa Fund has been structured to be registered under the rules and regulations of the Bahrain Monetary Agency (BMA), and is contemplated to be managed by an asset management company, Injazat Capital Limited, registered and licensed for operation under the laws and regulations of the Dubai Financial Service Authority (DFSA). An application for the registration and authorization of the Fund has been filed with BMA, which is currently evaluating the credentials of the Fund. The Fund may hold Islamic debt not exceeding a 60/40 debt-to-equity ratio. Injazat is currently managing Injazat Technology Fund, a US$ 50 million technology fund, successfully investing in technology, media and communication companies across the Middle East and North Africa region (MENA).