Guest Contributor | Feb 21, 2024 | 0
Nedbank teams up to boost small businesses
Nedbank Namibia is partnering with the Namibia Special Risks Insurance Association (Nasria) to help micro, small and medium (MSM) enterprises.
Participating financial institutions seek to address a significant hurdle faced by most MSM enterprises – the lack of collateral to secure business loans from commercial financial institutions.
The Finance and Public Enterprises Minister, Iipumbu Shiimi, started the Credit Guarantee Scheme for MSM enterprises in 2020. The Development Bank of Namibia, Nasria, and the Bank of Namibia are working together on this project so that MSM enterprises that are eligible and only need collateral can get 60% of their loan amount covered.
Sam Ikela, Head of SME Banking at Nedbank Namibia, explained, “The Credit Guarantee Scheme is here to help MSM enterprises get loans from commercial banks even if they don’t have enough collateral. This is important because small businesses in Namibia have a lot of potential for success, but they often don’t have the collateral traditional banks need.”
Minister Shiimi said that this partnership is a smart way to help MSM enterprises who struggle with collateral. The government and the Bank of Namibia have put N$98 million into this scheme. It will help MSM enterprises by covering 60% of their loan amount.
According to the local definition, MSM enterprises employ between 1 and 200 employees, and contribute an estimated 12% to the national economy, providing livelihoods to about 200,000 people.
Nedbank is one of two banks in Namibia offering this scheme with N$20 million, helping MSM enterprises apply for loans and get some collateral cover. More banks are planning to join the scheme, offering small busineses even more loan options.
The Development Bank already helps MSM enterprises by making it easier to get loans without too much collateral. They’re working with banks like Nedbank to reach even more MSM enterprises who want to get loans from regular banks. Nasria Ltd, which started in 1987, provides special insurance for the scheme, reducing the risks for all stakeholders.
Nedbank Namibia Head of SME Banking, Sam Ikela.