First collateral-free micro-enterprise fund for SME prospects

First National Bank Namibia announced this week a first for business lending, a no-collateral, tailor-made fund for Small to Medium Enterprises.

The SME Special Fund was launched by the SME business unit to prospects directly within the SME sector and start-up ecosystem for businesses with viable ideas and healthy cash flow projections.

Head of SME and Growth at FNB Namibia, Sam Ikela, said at the launch of the N$100 million fund, which is targeted mostly at micro-business in the informal sector that the SME Special Fund is an earnest approach to the call for development funds in line with the Harambe Prosperity Plan.

The fund, Ikela said,, is like no other available to the most rudimentary business with proof of return on invest. The fund has been specifically established to support, develop and grow the SME sector by providing the necessary financial and technical assistance to SME’s.

“Our SME strategies have been successfully integrated within our branch network. Prospective clientele can call on any of our branches for assistance. One of the main intentions of applicants should be the creation of long-term employment” Ikela said. “In this case, we would like to encourage prospective loan beneficiaries to provide us with asset and mortality insurance cover.”

SME Compete, a business development and training provider will provide prospective applicants with further training.“We encourage loan beneficiaries to attend business management training with SME Compete” Ikela said.

FNB Business, Executive Officer, Johan van der Westhuizen said that the new fund allows for the taking up of risk on behalf of the bank. “With risk goes interest rates and we will judge applicants on their ability to provide sound value propositions and a repayment schedule, “ he said.

Ikela did not shy away from the issue of some SMEs choosing to remain unbanked to avoid taxes. The bank’s strategic interest is to, Transact, Invest, Lend and Insure and is not only focused on SME lending but also non-lending products to provide total customer value.

“We understand the particular needs and preferences of SMEs and have developed tailored value propositions to overcome the historical challenge of high credit risk” Ikela said.

Pictured is the FNB Business team (From left) Rodney Amulungu, Alex Shikemeni, Sam Ikela (Head of SME Growth), Johan van der Westhuizen (Executive Officer: FNB Business), Este Kamati, Alexia Rusberg and Fanie Steenkamp (Head of Commercial Banking).