With healthcare on the verge of substantial expansion in the UAE, financial players like ADCB are moving fast to provide financing solutions to the industry’s leading companies.
With its rapidly rising population, the UAE has realised the need for adequate healthcare solutions to serve its residents. The National Bureau of Statistics estimates the UAE’s population to grow by 5.6% by the end of 2012, to 7.6 million from 7.2 million in 2011. This will no doubt lead to more demand for more space and services across the board. The GCC healthcare 2025 Report by McKinsey & Co. estimates the demand for hospital beds across the country to increase by 160% by 2025.
Governments are pouring invesments into the sector and working with the private sector on a number of initiatives. Officials have also taken steps to receive international accreditation for various healthcare facilities throughout the country. This year, Abu Dhabi’s Executive Council announced the approval of 14 new health care facilities to be constructed, including six new hospitals in the Emirate. Dubai’s government is also aiming for world-class standards for its healthcare sector by positioning itself as a future hub for medical tourism. A delegation from the Dubai Health Authority recently visited medical facilities in Turkey to observe the best practices and standards being used in the country, which is among the top ten destinations in the world for medical tourism.
Many in the industry will be dealing with signifcantly higher costs as a result of this fast growth and development. The McKinsey & Co. report on healthcare spending predicts surging costs in the sector, with total UAE healthcare costs expected to increase fivefold from USD12 billion now to USD 60 billion from by 2025. Although financial support from governments has been substantial, there still exists a gap in the private sector in terms of financing such growth in a sustainable way.
Abu Dhabi Commercial Bank (ADCB) is one key player that has realised this substantial opportunity by facilitating asset backed financing for medical equipment. ADCB Business Banking has partnered with manufacturers, dealers and distributors of various equipment within the industry.
“ADCB caters to the healthcare industry through its products, specifically, financing on equipments used in the healthcare business; these could range from X-Ray machines to a fully fledged MRI lab, and so on,” says Nilanjan Ray, Vice President Head of Business Banking Division at ADCB. “There is a huge interest in this space from a lot of private players. Looking at the financial needs of players in this industry and the fact that there are very few options available which are tailored to the need of customers in the healthcare business, ADCB has made a foray into this space. “
Ray says the bank has been actively working with the private sector players for some time to support their growth and developments in industry. These type of partnerships are of critical importance as they provide a stronger foundation for future growth. “We believe such alliances are important as it not just addresses the customers need more effectively but a partnership of this kind helps ADCB and the partner reach out to a much wider customer base,” says Ray. The industry will inevitably grow in the years to come and there will be a influx of quality by way of world class facilities, manufacturers and service providers entering the business. Therefore all our current partnerships will help us address this demand effectively and ensure that we can be ready to meet the demand when it comes.”
Last year, ADCB announced a partnership agreement with Siemens Healthcare UAE to launch ADCB’s BusinessEdge Medical Equipment Loans in the UAE. The product is designed to meet the requirements of the local medical and healthcare industry, including hospitals, clinics, laboratories and pathology labs, by funding the purchase of medical imaging and therapy equipment. The product is expected to focus largely on the small and mid sized clinics and practitioners.
The partnership between ADCB’s SME division and Siemens Healthcare, has been established to ensure that SME customers from the
healthcare industry have easy access to flexible and customised finance options in purchasing the equipment they need to start up or further develop their business. The partnership will entail combined efforts for promotions and holding various events throughout the year.
“The ADCB BusinessEdge Medical Equipment Loan is yet another step in our efforts to offer customers flexible and customised
products and services,” says Ray. Referring to the partnership he noted that: “The alliance with Siemens will result in a focused and tailored financial product proposition, combining the financial expertise of ADCB’s SME division with industry leadership and knowledge from Siemens, greatly benefitting customers.”
In a statement addressing the partnership, Maurice Faber, Vice President for Healthcare at Siemens said: “The partnership will allow access to the latest imaging, diagnostic and therapeutic technology to a much wider set of providers and in turn, the patients.”