November 2022

Quick Bite

70.5% of healthcare expenditure in Nigeria is funded out of pocket, more than twice the average for sub-Saharan Africa.

Care Now, Pay Later: A Silver Bullet?

The Meat

Care Now, Pay Later: A Silver Bullet?

Among the trends that captivated the technology world in 2021 was the rise of “Buy Now, Pay Later” or BNPL. This frenzy culminated in the $29 billion acquisition deal between Square and Afterpay. And the train has hardly stopped. While the covid pandemic and consequent lockdowns played a key role in both the rise of ecommerce and the accompanying BNPL trend, there is no doubt that the model remains relevant today. Startups offering “buy now, pay later” for all kinds of goods and services continue to sprout. Similarly, legacy businesses, including banks and retail brands, have either debuted in-house BNPL offerings or partnered with third-party financiers. So far, the biggest players have focused on consumer ecommerce. But could this model be applied to the healthcare sector in Africa, especially patient financing? This article explains.

The Africa Healthcare Sector Today

Last month’s issue of The Slice focused on a key impediment to quality healthcare in Nigeria and other major African economies; the poor state (and absence of) advanced medical facilities in both public and private tertiary hospitals. While inadequate facilities remains a challenge, there is no gainsaying the role of limited patient financing. A key statistic on the state of Africa’s healthcare sector is the staggering amount spent on foreign medical trips. Nearly $6 billion is spent annually on foreign medical trips, with Nigeria accounting for over 20% of this amount. However, this only captures a small subset of the population. It fails to capture the percentage of people who lack access to advanced medical care (at home and abroad) due to the high upfront cost of these procedures.

The numbers are stark. Nearly  70.5% of total medical expenditure in Nigeria is funded out of pocket; a ratio that remains one of the highest in the world and more than twice the sub-Sahara African average. Sub-Saharan Africa’s ratio of 30% still ranks among the highest of any region in the world. This reliance on out-of-pocket payment is a consequence of multiple factors, including the absence of effective universal coverage policies, deliberate refusal by insurance companies to extend coverage to certain locations due to the poor economics of doing so, and the impact of religious/cultural beliefs among others. However, while most families have done a relatively good job of funding periodic treatments of common illnesses out of pocket (albeit with occasional fatalities), this model falters in cases of expensive, one-off medical procedures as well as the management of chronic illnesses. 

Think cataract surgery, Kidney dialysis, or knee replacement surgery among others. Low-income and lower-middle-income families either resort to seeking donations, relying on sociocultural ties, or giving up completely. Thus, conditions that could be cured or managed through routine medical procedures effectively become death sentences or lead to permanent disability. But these families aren’t alone. For families who do have some form of medical insurance, the insurance plan might require a co-payment that renders a full upfront payment impractical, thereby leading to delays in treatments. Thus, families on either side of the aisle might require help in the form of installment payments.

CNPL To The Rescue

As the foregoing paragraph shows, a significant number of families on the continent face the risk of a major medical condition for which upfront payment (full or copay) is impracticable. These families are left to choose between possible bankruptcy and death or permanent disability. For these one-off, high-ticket medical procedures, the BNPL model might offer some reprieve. The concept of “care now, pay later” (CNPL) is fast gaining ground in key markets, including countries with high insurance penetration. The CNPL company provides a lump sum payment on the patient’s behalf to the hospital. In turn, the patient is allowed to pay in installments over time, depending on the estimated recovery period as well as the patient’s financial condition.

While the CNPL model derives from BNPL, there are slight differences. Foremost, instead of funding the purchase of a new phone or shoe, CNPL funds a medical procedure. This comes with its own risks. For advanced procedures, the risk of death and/or post-surgical complications remain. Similarly, while BNPL funds an active individual, CNPL funds an individual who might need time off work to recuperate. This necessarily increases the payment cycle from a few weeks to a few months up to a year. Thus the BNPL model’s reliance on low interest combined with high turnover volume for loans would not apply. Nonetheless, a well-structured CNPL package that funds selective medical procedures with a relatively high success rate and low recuperation period could help provide lifesaving healthcare for millions across the continent. Possible starting points include funding cataract surgery, hearing aids, and other similar procedures. 


Low insurance penetration rates, high out-of-pocket payments, and high copay for insurance policyholders expose millions of families across the continent to the risk of bankruptcy, death, or permanent disability. CNPL could help provide a lifeline albeit with limits. One of the earliest pioneers of this health financing model is DoctorPay whose partnership with Carbon seeks to fill this gap. However, considering the swathe of uncovered people across the continent, a huge market awaits new players. However, these players would be well aware of the risks facing the BNPL space in general and CNPL’s idiosyncratic risks. Kwakol’s research team is at the forefront of trends in the continent’s leading sectors. Reach out to us today

Crystal Ball

What We Are Following 

An attempted coup was foiled in Sao Tome and Principe over the weekend, leading to multiple deaths and injuries. The development comes on the heels of multiple coup d’etat across the West/Central Africa region. Sao Tome ranks as one of the region’s most stable polities. The development is rather worrying. We are closely watching. 

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