WEB DESK: The present government has been striving to provide health facilities to the common people at affordable rates. On 15th July, 2015, the State Bank, in consonance with the objectives of Prime Minister’s National Health Programme (PMNHP), launched a soft loan scheme for healthcare providers to upgrade their facilities.
Under the scheme, mark-up will be charged at KIBOR+500 basis points (bps), however, borrower will actually pay 6 percent and the difference of the cost of KIBOR+500 bps will be paid by the federal government. Under risk mitigation, the government will bear up to 5 percent losses on the portfolio of banks under this programme. As per other terms and conditions, loans under PMNHP will be offered to private empanelled hospitals for upgradation of their facilities including equipment purchase, operation theatre upgradation and improvement in emergency services.
All hospitals, clinics, healthcare units empanelled/shortlisted under PMNHP will be eligible for loans. In addition, qualified MBBS/BDS doctors from an institution recognised by PMDC, clinics/hospitals/labs registered with PMDC and PMA, sole proprietor, partnership firms, private and public limited companies, other bodies/trusts running hospitals and empanelled in PMNHP will be provided soft loans.
Debt-equity ratio will be 80:20 and the borrowers’ contribution of equity could be in the form of existing assets and property offered as collateral subject to valuation by banks. Soft loans under PMNHP will be term loans up to Rs 10 million and with maximum tenor of eight years.
Loans will be disbursed in single tranche but the mode of repayment will be equal monthly instalments. NBP and FWBL will be the executing agency while other banks will also be encouraged to participate in the scheme. The facility for soft loans will be initially launched in 23 selected districts but would subsequently be enlarged to cover whole of the country.
It may be mentioned that PMNHP is not the first initiative of the present government to facilitate the provision of health facilities to the poor. Earlier, the government had launched Prime Minister’s National Insurance Programme (PMNIP) to provide inpatient hospitalisation insurance coverage to 3,100 million enrolled beneficiaries. The coverage limit is Rs 50,000 for secondary care service and Rs 250,000 for tertiary care for specified diseases as per the programme parameters.
Pakistan Bait-ul-Mal (PBM) was to cover the patients who completely utilise the basic limits. The programme now launched through the SBP to upgrade the health facilities was already announced, albeit in a nutshell, by the Finance Minister in his latest budget speech. The aim of the new programme is obvious. Unlike the PMNIP, the new plan would not only help the vulnerable and marginalized segments of society through improvements in facilities available in hospitals, clinics, etc, but also support the growth process in the long run by enhancing the potential of the income generating people. Of course, a healthy population could be more educated, innovative and productive which could be very helpful in accelerating the growth process.
However, what we are assuming here is the provision of health services at a lower rate due to soft loans offered to healthcare providers by commercial banks. If healthcare providers do not pass on benefit of subsidy to patients, the purpose of the scheme will not be achieved. The full benefit of the scheme will also not be realised if borrowers do not utilise the amount of loans for the specified objective but misuse the loan for some other purposes.
The scheme could also have certain other pitfalls. It could lead to some segmentation of credit which may result in sub-optimal allocation and utilisation of credit. Besides, since the amount of subsidy has to be borne by the government, the expenditures of the government would rise, leading to a higher budget deficit to a certain extent. It may be reiterated that even the US is finding it difficult to meet the expenses on schemes like Medicare because of their huge burden on financial resources of the country.
Lastly, we are unable to understand the title of scheme. There is no reason to designate the scheme as PMNHP when subsidy has to be paid not by the Prime Minister but through the budgetary resources of the government.
Source: Business Recorder