Nur Clinic, in Azerbaijan’s capital city Baku, was established in 2005 to expand access to care for the district’s 50,000 residents. The clinic, the only one in Baku with its own modern facilities, launched with the capacity to treat four in-patients and 10 diagnostic patients.
Clinic administrators realized that in order to improve quality of care and expand services, the clinic needed additional financing for new equipment and staff training. However, expenditures and outstanding bank loans associated with the clinic’s recent launch made it difficult for Nur Clinic to access additional financing. Mehbare Mammadova, owner and Chief Medical Officer at Nur Clinic, said the banks were unwilling to lend to a new health care institution with a short credit history and outstanding loans.
Leasing as an alternative source of financing
A client of AG Bank, Mrs. Mammadova learned about the opportunity to lease medical equipment through AGLeasing, a financial institution that works with the IFC Azerbaijan Central Asia Leasing Facility Advisory Services Project. This project has helped train AGLeasing’s staff to consider problems like Nur Clinic’s, and help expand access to finance for these types of companies. Following a review of the clinic’s operations and risk assessment, AGLeasing approved the clinic’s lease of medical equipment for the amount of $ 45,000.
“If not for IFC’s advice and consultation, we would not ordinarily consider a business such as Nur Clinic as a viable client. However, having gone through the review process with IFC’s help, I now see Nur Clinic as a sound business, with a good operational model,” said Azar Mammadov, General Manager of AGLeasing. “We now view Nur Clinic as a good long term client for AGLeasing,” he added.
“This made a huge difference in how we were able to expand and conduct business,” says Mrs. Mammadova. By upgrading its equipment and training staff in international best practices, the clinic has expanded its diagnostics, general surgery and inpatient care. “Through leased equipment, we are able to provide better medical services,” she adds.
How does the Azerbaijan-Central Asia Leasing Facility improve leasing in the region?
- The project has helped Participating Financial Institutions (PFIs) introduce and implement new policies and procedures on leasing, risk management, asset/liability management, and internal audit/controls, thereby strengthening their institutional capacity.
- PFIs have engaged in more than $58 million in leasing transactions since working with ACALF – in the first half of 2007, clients increased their leasing portfolio by 36%.
- The project has developed 18 training modules and conducted 34 trainings. A total of 462 people were trained in areas such as credit risk management, HR management, financial analysis, and monitoring of leases.
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