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Micro financial firm stays afloat

Mecky Heita, Manager of Investments and Risk at Kongalend Financial Services

Mecky Heita, Manager of Investments and Risk at Kongalend Financial Services

Since its transformation into a private equity institution in 2010, Kongalend Financial Services has managed to disburse a total of 2447 loans, to the value of N$80 million countrywide.
Kongalend Financial Services is a micro finance development focused institution.“The institution was established in 2005, during that time it was managing the solar revolving fund on behalf on the Ministry of Mines and energy. That fund was tasked to offer loans to the public to acquire renewable energy systems, which are basically solar powered systems, such as for lighting, geysers, water-pumps for the farms and so fort,” said Mecky Heita, Manager of Investments and Risk at Kongalend Financial Services.
She said that initially the program had a time frame of five years, which was up to 2010 and that when it came to an end the ministry took over the fund, but Kongalend continued as a private entity building its own portfolio, because the demand was so high.
Since 2010 the institution offers four types of loans, namely green energy loan, Lima power loan, group power loans and SME Financing; each loan has its own specific requirements.
Heita explained that the minimum requirements for each of these loans are that applicants must be between the ages of 18 to 60 years, must be Namibian citizen and they should use the suppliers list provided by Kongalend.
These loans, however, must be used to finance an existing business, start a business or to acquire renewable energy equipments or systems from Kongalend’s list of suppliers, which are provided.

“For the SME finance, a reliable business plan must be provided, which must clearly the detail all aspects of the business supported by a quotation and a clear detailed loan usage plan. This is to ensure no misuse of our loans, because we pay directly to our suppliers according to what the successful applicants have ordered or require,” she clarified, as Kongalend does not provide cash loans but provides lines of credit to successful applicants to finance a range of goods and services according to their needs.
Heita also explained how their institution should be differentiated from micro lending as they are of the  micro financing nature. “Micro Financing is for individuals or entrepreneurs and small businesses, who lack access to banking and related services for loans,” she said.
“Our target market is one that is not well serviced by other financial institutions and this keeps the demand constant,” she added.
“Micro finance is relatively new in the country and regulated by Namfisa. However, that is because there is no specific micro finance regulatory framework in the country, that is the only window that we can be fitted in, for us to operate,” Heita said.
Hania Janiurek-Ashipala, General Manager: Corporate Communications said,“We provide productive credit for those who lack access to credit from other financial institutions. It is productive in the sense that, these loans have to be used for purposes of income generation, and have to be paid back over a period of six months to five years, according the amount acquired and loan type.”
Janiurek-Ashipala also highlighted on one of the loans they offer, Lima Power loan were she said it is designed for those with knowledge or training in Agriculture and subsistence farmers, “we want to enable these small scale farmers who provide for their families, to at the same time generate some income by growing their Agribusiness, giving them access to acquire appropriate machinery,implements and inputs, such as seeds and fertilizers, to improve crop productivity.”
The institution also encourages these farmers to gain knowledge in conservation agriculture techniques, in order to conserve the environment.
With offices in Oshakati, Ondangwa, Rundu and an agency in Walvis Bay, the institution is set to reach all corners of the country. The institution has financed businesses in areas of jewellery, Clothing, photography and chicken farms, “our overall responsibility and aim is to contribute to the development of the country,” said Janiurek-Ashipala.

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