Provision of loans to SMEs contributes significantly to the revival of businesses: !Gawaxab
The revamped scheme to support small and medium enterprises (SMEs) faced with challenging economic conditions has assisted 80 SMEs across the country, with capital worth N$85.9 million, the Bank of Namibia (BoN) said Friday.
The scheme was re-launched in February this year in response to the economic challenges posed by the COVID-19 pandemic and the lingering effects and is now instrumental in providing affordable financing to businesses in various sectors.
“By providing much-needed capital, these SMEs are given a shot in the arm and have created employment opportunities for Namibians who would have otherwise been jobless in the aftermath of the pandemic and geopolitical storms, which gave rise to inflationary pressures,” said BoN Director of Strategic Communications and International Relations Kazembire Zemburuka in a statement.
According to Zemburuka, the loan scheme is designed to support SMEs to promote economic recovery.
It involves the allocation of N$500 million to eligible SMEs. As per the guidelines, SMEs can seek loans from N$ 50,000 to N$10 million.
The loans are disbursed at a rate equivalent to the current prime lending rate, with a reduction of 50 basis points and less stringent conditions. The loans aim to assist businesses in paying for operational expenses such as salaries, rent and lease agreements, and contracts with suppliers.
Currently, 200 SMEs have submitted applications for the loan scheme. Out of this number, 80 SMEs, with a total value of N$85,9 million, have been granted the loan, while the remaining 120 applications are presently undergoing review. The SMES hail from wide-ranging sectors, including
hospitality, retail, import and export, and oil and gas.
The BoN governor, Johannes !Gawaxab said the positive reception of the SME Economic Recovery Loan Scheme is a source of encouragement.
“It underscores the pressing demand for such assistance for SMEs. We are convinced that the provision of loans will significantly contribute to the revival of businesses. We are steadfast in our dedication to ensuring the scheme’s accessibility to eligible small and medium-sized enterprises nationwide,” he added.
SMEs have since been urged to contact their respective commercial banks and the Development Bank of Namibia for further consultation and application procedures.