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Boosting SMEs to drive economic growth

Boosting SMEs to drive economic growth

By Michel Haoses.

Amid soaring inflation, and high interest rates, small business owners are navigating challenging times and it is now more than ever imperative to support Small and Medium Enterprises (SMEs) given their significant contribution to the Namibian economy.

Nedbank’s Head of SME Banking, Sam Ikela highlights the bank’s alignment with the government and the broader financial services industry’s vision to support the economy’s recovery from the COVID-19 pandemic.

According to Ikela, a significant hurdle hindering SME growth globally is the surge in inflation aggravated by the lack of finance and this trend is similar locally underscoring the pressing need for financial support and stability in the SME sector.

He highlighted two initiatives supporting SMEs, namely; the SME Economic Recovery Loan Scheme, a government-backed initiative, in partnership with banks that provides SMEs with N$500 million for improved financial access covering operational expenses.

Ikela also mentioned NASRIA’s Credit Guarantee Scheme which offers 60% collateral cover after a successful assessment of an SMEs bankability and lack of collateral and as an industry partner

He further explained that SMEs do want to grow and take on bigger jobs or tenders but the issue lies with lack of capital therefore after having identified this, Nedbank’s contract financing solution has emerged as a viable option, providing businesses with funds against tender documents, purchase orders, or project agreements.

Ikela added, that although access to finance will address a significant part of the challenge, it will only address one part of the business equation, given that Namibia’s digital population has exceeded 51%, becoming imperative for SMEs to accommodate an increasingly tech-savvy consumer base.

Therefore, the implementation of the African Continental Free Trade Area (ACFTA) in January 2021, which expanded the African e-commerce ecosystem presents a significant opportunity for Namibian businesses.

Local SMEs can sell goods and services to participating member countries on more favourable terms and in response to these developments, Nedbank introduced Avo Supershop, an e-commerce platform that enables SMEs to market their products and services online

“This initiative aims to assist businesses in capitalising on the opportunities presented by the ACFTA and the growing digital landscape,” Ikela said.

By focusing on the collective effort to support SMEs, various stakeholders like Nedbank Namibia aim to be trusted financial service partners, providing the support and confidence that businesses need to scale, innovate, and maintain their role in the economy.


 

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