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SBP’s Easy Loan Scheme for Facilitating Covid-19 Patients Being Misused by Hospitals for Business Expansion

Hospitals, diagnostic centers, and healthcare service providers have availed a significant amount of loans, nearly Rs. 12.5 billion, from various commercial banks to enhance their treatment facilities through their respective networks, official data by the State Bank of Pakistan (SBP) showed.

The massive amount on the account of loans was made possible by the SBP, as the central bank introduced a low-cost loan facility for healthcare institutions for the first time in 2020. The facility is aimed at enhancing the treatment capacity of hospitals in the wake of the COVID-19 outbreak.

The 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.

In this connection, 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.

There were a total of 50 healthcare institutions that applied for loans up to Rs. 17.4 billion from various commercial banks, but their requests are being processed and scrutinized by the banking staff, SBP data said.

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

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

However, at the same time, while most of these hospitals applying for loans are well-known and operating in major cities of the country, some of these hospitals are not providing services to COVID-19 patients at reasonable fees, it is noted.

Despite availing of the low-cost financing facility, these major banks charge heavily for COVID-19 testing, its treatments at the hospital, and the vaccination cost, which shows the ineffectiveness of the scheme to provide relief to the general masses.

The COVID-19 testing is available at an average cost of Rs. 6,000 at various hospitals and diagnostic centers, but some of the hospitals are charging over Rs. 12,000 per patient. Some of the hospitals and labs have also signed up with various airlines and receive a large number of clientele for COVID-19 testing as a result.

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

The government needs to set a maximum limit for treatment charges of patients suffering from the deadly pandemic, through a regulatory authority. It should be done mainly for those hospitals that are availing specials funds and low-cost financing facilities from the banks.

Otherwise, this scheme will remain a tool to strengthen the business of the healthcare sector rather than fulfilling the purpose of creating affordable access to the hospitals for the masses at large.

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