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Blue Bank joins credit guarantee scheme – offers 60% collateral reduction for qualifying SMEs

Blue Bank joins credit guarantee scheme – offers 60% collateral reduction for qualifying SMEs

Standard Bank Namibia has announced that it has partnered with the Credit Guarantee Scheme (CGS) to provide collateral cover of 60% for qualifying SMEs applying for finance from participating commercial finance institutions.

Standard Bank’s Enterprise Direct Manager, Felicia Jooste said the bank has a genuine desire to see SME’s grow and thrive in difficult economic conditions.

“We are determined to help our small and medium businesses navigate these difficult prevailing conditions, hence the reason we joined the Credit Guarantee Scheme,” she said.

She added that SME’s are the lifeblood of the economy and employ thousands of people across various sectors. “We have undertaken various initiatives to support our SME’s and we found the CGS to be an additional and worthwhile undertaking to participate in, not only to help them grow as companies but also to help them grow the country’s economy and by so doing alleviate a number of our social challenges,” Jooste noted.

Launched in August 2020 by Minister of Finance Ipumbu Shiimi, the CGS provides collateral cover of 60% for qualifying SMEs that apply for finance from participating commercial finance institutions.

The CGS caters for SMEs with viable business plans that lack collateral to obtain loans. Commercial finance institutions require collateral to preserve their capital in the event of businesses being unable to repay their loans. By insuring credit granted to qualifying SMEs, the Scheme substantially reduces the collateral requirement for qualifying SMEs by 60%.

SMEs that may qualify for the Scheme are identified by the participating financial institution in terms of their own assessment of the bankability of the business plan.

Seeded with N$98 million from the Government and the Bank of Namibia, the CGS is operated as a smart partnership between Development Bank of Namibia (DBN), Namibia Special Risks Insurance Association (NASRIA) and the participating financial institutions.

Talking about the CGS, DBN CEO Martin Inkumbi hopes to see all financial institutions lending to SMEs joining the scheme. He pointed out that national policy is striving to develop economic activity in Namibia through establishing a conducive environment for SME startups and growth.


 

About The Author

Mandisa Rasmeni

Mandisa Rasmeni has worked as reporter at the Economist for the past five years, first on the entertainment beat but now focussing more on community, social and health reporting. She is a born writer and is working on her degree in Journalism at the Namibia University of Science and Technology (NUST). She believes education is the greatest equalizer. She is the epitome of perseverance, having started as the newspaper's receptionist in 2013.