SME bank a reality after a protracted process
More than three years after Cabinet gave its blessings to the formation of a bank that caters exclusively for small and medium enterprises, the highly anticipated SME bank will soon become a reality.
Speaking at the “groundbreaking ceremony” of the SME bank held in the capital this week,Trade and Industry Minister, Dr Hage Geingob said the much-awaited bank is set to open its doors to the public in the first half of this year.
Zimbabwean commercial bank, Metropolitan was chosen as a technical partner in the venture ahead of five other banks. Investors from the bank are set to invest between N$14 and N$18 million into the project that is three years behind schedule because of a protracted due diligence process which saw government officials visit Zimbabwe on three occasions to ascertain the suitability of Metropolitan Bank as a partner to the project, a process that riled Geingob.
Briefing journalists at the “groundbreaking ceremony” on Monday, Geingob said he was appalled by the slow bureaucracy which led to the delay of the opening of the bank which had already received the necessary approvals. The Minister said he felt sorry for investors who have to come in the country and experience such red tape and slow bureaucracy.
“I hope other investors would not go through this,” he added.
The SME bank will initially open its doors in Windhoek central, where it is renovating its N$20 million premises, and Katutura before spreading its wings in all thirteen regions of the country.
Geingob told journalist that the bank will have a commercial leg that will take commercial deposits from the public as well as give loans that will require collateral while the other section of the bank, funded through government, will give out loans without collateral.
In order to sustain the operations of the bank, the commercial division of the bank is expected, to plough back 10 to 20% of its annual profits into the bank.
Once operational, the SME bank will give out collateral-free loans from as little as N$3000 up to N$150 000.
The shareholding and management structure of the bank will be announced in due course.