An Investigation Into the Use of Venture Capital by Private for-profit Managed Health Care Firms (Hmo's) in Kenya
Abstract
This research project investigated the use of venture capital by for-profit health
management firms in Kenya. The firms are important because their services are critical
to the development of Kenya. Venture capital is provided to firms operating in risky
sectors with high growth and return potential. This research established that these firms
lack funds to provide affordable and comprehensive health care and venture capital is an
important source that can alleviate this problem. A questionnaire was used to collect
primary data from all the managed health care firms in Kenya. The study also established
that bank loans and personal savings are the main sources of finance but firms avoid bank
loans because of the high interest charged on them. Half the firms investigated used
venture capital mainly for restructuring and expansion and 30% used venture capital to
start their operations. Respondents indicated that the health Management sector is risky
because of high variations in returns. This makes most financiers for example banks to
charge high interest rates or give no loan at all and this makes it a fertile ground for
venture capitalists. All respondents believe that existing venture capital firms need to
create more awareness in Kenya about their operations. Major providers of venture
capital in Kenya are foreign multilateral institutions and the main determining factor for
a venture capitalist to invest is the product/service and returns.
Citation
MBAPublisher
School of Business, University of Nairobi
Description
Master of Business Administration (MBA)