Erongo benefits from DBN’s new policy
Latest figures from the Development Bank of Namibia (DBN) shows that the Erongo Region has overtaken the Khomas Region in terms of the value of loans given to businesses on a quartely basis.
With 23.3% of total loans given out by DBN in the second quarter of 2012, the Erongo Region has benefited from the bank’s new policy of having all regions benefit meaningfully from the loans advanced.
In the quarter ended 30 June, the Development Bank of Namibia approved N$81.4 million in loans. Of this, 70% of financing was approved for SMEs while corporate business approvals amounted to 24.9% and guarantees 5.1% respectively.
The bulk of financing went to the construction industry, which received N$26.4 million followed by wholesale, retail trade, and repairs, which received loan approvals amounting to N$21.4 million.
DBN’s Head of Lending, Martin Inkumbi said: “The results of the second quarter show that SMEs continued to receive the bulk of approvals. This is a result of the uptake of DBN’s bridging finance product, through which contractors receive financing to carry out contract and tender-based jobs. Bridging finance approvals amounted to N$ 46.6 million to implement tenders valued at N$ 261.5 million.”
As a result of the new loans, 488 new and 757 temporary jobs were created while jobs retained amounted to 309. Of the approvals, 94% went towards financing Black Economic Empowerment (BEE) initiatives and 19% of that amount to female BEE ownership.
At the end of the second quarter, the DBN had a total of 487 clients on its loan book, of which 76 are large corporate businesses and 411 are SMEs.
DBN’s CEO, Samuel Nuyoma recently told The Economist that the bank ,going forward, will deliberately limit each region’s total loan allocation to 30% in order for the bank’s loans to have an impact across the country.
He said: “Are we having an impact so that Namibia in its totality is contributing to economic development? To what extent is our support being spread so that we dont have concetration in one region?
“As a natural phenomena, Khomas region because of it being the business hub of Namibia will always have a greater concentration but we have to limit it.
“As a matter of policy no region should have more than 30% of the assistance given.”