KENYA – Kenya Medical Supplies Authority (KEMSA) has introduced a new credit management strategy to ring-fence county government allocations to pay debts owed to the state agency to boost its service delivery capacity.
KEMSA is a specialized medical logistics provider for public health facilities and programmes under the Kenya’s Ministry of Health whose mandate is to procure, warehouse and distribute medical supplies.
It is the first point of call for procurement, warehousing and distribution of Health Products and Technologies listed in relevant essential lists at various county and national health facilities.
The law currently requires counties to procure medical supplies from the authority as the first point of call hence the state agency earns lucrative business deals from the devolved units which are its single largest customer cluster.
However, the counties owe KEMSA about KES2.64B (US$23.22M) for medical supplies since November 2021 causing the authority to set a target to collect at least KES 500 million (US$4.28M) in outstanding dues under the new credit management strategy.
The pending bills owed to the Kenya Medical Supplies Authority by county governments dropped from KES3.9 billion to KES2.7 billion after nine counties were given a clean bill of health after clearing their outstanding bills.
Subsequently, KEMSA has stepped up recovery of pending bills owed to the state agency through the new collection strategy which has restructured and separated the sales and credit management functions which were previously one unit.
The enhancement of the credit management functions under an independent department is geared at ensuring financial sustainability of the agency’s revolving fund for an efficient credit control process with stakeholders at the core.
Moreover, the speedy settlement of pending bills at KEMSA will in turn help the government agency fast track pending payments to its suppliers as well as boost the national scale of the Universal Health Coverage agenda.
KEMSA CEO Terry Ramadhani said the authority has stepped up medical supplies’ deliveries to the counties with increased credit sales collections and automated several of its functions and incorporated the use of information technology systems.
She further said that the agency has successfully dispatched KES9.73 billion (US$83M) worth of essential medicines and medical supplies as well as National Health Strategic Programs supplies countrywide as of mid-April 2022.
Earlier, the Kenya Medical Supplies Authority unveiled an electronic Local Purchase Order generation process as part of its transformation journey to further the Authority’s ethics and integrity assurance strategy.
Automating the LPO process will ensure that KEMSA eliminates the time spent for suppliers to pick the physical copy before making deliveries of medical supplies to enhance the Authority’s efficiency levels.
The electronic process also eliminates the need for human intervention in medical supplies procurement and deliveries which has been a key organizational integrity risk area.
Moreover, all LPOs will have an expiry date to prevent the delays witnessed when suppliers take too long to deliver under open-ended delivery timelines.
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