Guest Contributor | Jun 2, 2022 | 0
Development Bank resumes funding of SMEs
In the wake of the SME Bank saga, the Development Bank of Namibia (DBN) announced that it will will resume financing of small and medium enterprises.
Talking about the resumption of SME finance, the Bank’s Chief Executive Officer Martin Inkumbi said that due to the gap in the market for finance, the Bank and the Minister of Finance, Calle Schlettwein who is the Bank’s shareholder representative, have agreed that DBN should take the necessary steps to resume its financing activities for SMEs.
Inkumbi said that the Bank has the capacity, the necessary pool of capital, as well as the ability to redirect human resource capacity to fill the gap. Previously, the Bank shifted its focus to providing finance for larger enterprises.
Inkumbi, however, stressed that the Bank has maintained its stable of SME borrowers that it developed prior to the shift in focus, and that new borrowers will be inducted into the current system.
Inkumbi added that new applicants will be required to demonstrate viability of proposals for finance in terms of the Bank’s assessment process, including business plans, the necessary human resources to maintain operations, willingness to share risks with the Bank, and consideration of aspects of risk entailed in individual applications.
According to Inkumbi, DBN has put in place an environmental and social management system to ensure adherence to relevant environmental and social legislation, and to minimize negative impacts on the environment.
He also added that the Bank has introduced a client support function which can provide coaching and mentorship to further develop capacity for SMEs.
On the topic of the current SME Bank borrowers, Inkumbi stated that DBN will not necessarily be taking over existing loans, but will consider new financing requirements to start and or expand business activities.
All applications for finance will be subject to DBN’s normal due diligence process. This process, Inkumbi explains, was established, and has been tested and refined over the years, since the Bank’s inception in 2004.
Inkumbi added that the bank is aware of the importance of SMEs for the economic development of Namibia and that consequently, successful applicants for SME finance can expect more in terms of support.
All applications for SME finance will be treated on individual merit, based on the appraisal of the Bank’s Portfolio Managers, as well as its Credit and Risk Committees. Inkumbi directs potential applicants to the Bank’s website, where they can find out more about the requirements for borrowing and download application forms.