Healthcare institutions are misusing the ‘Pandemic Easy Loan Scheme’ for business expansion rather than COVID-19 relief

According to details, as soon as the facility was offered, renowned hospitals thronged to commercial banks to get the soft loans.

An official report by the State Bank of Pakistan (SBP) states that hospitals, diagnostic centers, and healthcare service providers have availed a significant amount of loans, nearly Rs. 12.5 billion, from various commercial banks. The healthcare facilities intend to invest these loans in enhancing their treatment facilities through their respective networks.

According to reports, the SBP has made the loan possible by introducing a low-cost loan facility for healthcare institutions via the central bank for the first time since 2020. This loan facility aims to enhance the treatment capacity of hospitals in the wake of the Covid-19 outbreak.

What does the Loan Facility entail?

The SBP data states:

The loan facility allows healthcare institutions to borrow from banks at the markup rate of only 3 percent, in addition to any services charges that vary from bank to bank.

According to details, as soon as the facility was offered, renowned hospitals thronged to commercial banks to get the soft loans and capitalize on the opportunity to scale up their network of services under different brands.

Currently, a total of 50 healthcare facilities have applied for loans of up to Rs. 17.4 billion from various commercial banks. According to the SBP, their requests are being processed and scrutinized by the banking staff.

Is the Loan Facility Proving to be Beneficial for the Residents of Pakistan?

The loan facility introduced by the SBP through commercial banks is justified in the prevailing circumstances as Covid-19 treatment needs special resources, including ventilators, separate wards, dedicated staff, etc.

However, instead of focusing on the coronavirus, banks are scaling up their capacity for general treatment facilities, with a belief of cashing in on the seemingly one-time opportunity of the banking regulator.

Reports state that most hospitals applying for loans are not providing improved services to Covid-19 patients at reasonable rates. Despite availing of the low-cost financing facility, the healthcare institutions are charging heavily for Covid-19 testing, its treatments at the hospital, and the vaccination cost.

Experts believe that if the cycle continues, the loan scheme introduced to provide relief to the general masses will be ineffective.

Expert Opinion on the Matter

According to reports, the Covid-19 testing is available at an average cost of Rs. 6,000 at various hospitals and diagnostic centers. However, some of the healthcare facilities are charging over Rs. 12,000 per patient.

Moreover, hospitals are reportedly charging over Rs. 100,000 per day from the Covid-19 patients to treat them in-house, besides charging exorbitantly high vaccination costs.

Experts state:

The government needs to establish a regulatory body that sets and oversees the maximum limit on treatment charges of patients suffering from the deadly pandemic. It should be done mainly for the hospitals that avail of special funds and low-cost financing facilities from the banks.

According to experts, if timely action isn’t taken, the loan facility will remain a tool to strengthen the business of the healthcare sector rather than fulfilling the purpose of creating affordable hospital access for the masses at large.

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