DBN signals intent to issue bond

The Development Bank of Namibia this week hinted at the possibility of issuing a bond. The lender recently engaged a debt capital raising strategy that currently hinges on the approval of cabinet. A future issuance of a bond will see the Development Bank of Namibia join the ranks of NAMPOWER and Telecom Namibia who have issued bonds in the past. Manager: Corporate Communications of the Development Bank of Namibia, Jerome Mutumba hinted that the lender was considering various financing options. He said “The Development Bank of Namibia is entering a phase where relying on government capitalization alone will not be sufficient to meet its capital requirements to support economic development projects and businesses in Namibia. Against this backdrop, the Bank is therefore looking at alternatives, including plans to raise money from the local market.” Mutumba remained tight lipped about the strategy and the process that will follow it through.  Added Mutumba “We have developed a debt capital raising strategy, which our shareholder, the Government of the Republic of Namibia, is currently considering, and once it has received the shareholder’s blessing, it will be implemented.”
According to the Development Bank’s latest annual report, total assets grew by 17% to N$2,376 billion, on the back of further capitalisation by the shareholder [government] and profits made during the year without raising debt capital.

According to the report, the bank has grown robustly during 2013 with new loan approvals exceeding N$840 million, in comparison to N$519 million achieved in the previous year. Total assets grew 17% to N$2.37 billion. The broad majority of approvals were made in the tertiary sector equating to 64.7%, and 35.1% in the secondary sector. A further breakdown shows that the transport, tourism and manufacturing sectors’ share of these allocations are 33.8%, 7.2% and 13.1% respectively. The vast majority of the funding was absorbed by the private sector equating to 63.2% of the total while approximately 30% was taken up by small and medium enterprises and the rest by the public sector.  The bank recently marked 10 years of existence, a period described as a decade of love by board chairperson Elize Angula. She further mentioned that the bank is an innovator in the field of providing finance on an inclusive basis, pointing to the development of Contract-Based Finance, which provides access to finance by enabling entrepreneurs to make loans using future revenue streams from allocated projects. Since its inception, the bank has approved 1446 facilities for 1149 entities. Of the approvals, 1228 were for SMEs. The approved loans had an estimated impact on 51,493 jobs and a value of N$4.046 billion.