Funding applications from manufacturing sector rare -DBN

Applications for funding from entrepreneurs in the manufacturing sector are rare compared to those from players in other sectors, says Dr Michael Humavindu, manager of research at the Development Bank of Namibia (DBN).
According to Humavindu, even though the bank received more applications in the sector in 2011 compared to 2010 and 2009 combined, only 21 projects out of 310 financed in 2011 were related to manufacturing, which is about 6.8 % of the bank’s total transactions.
“These transactions, however  make up 23.9% of the total funding approved,” he said.
Off the projects approved during the last quarter of 2011, “in terms of sectoral distribution, only 0.8% of applications were approved for manufacturing,” stated head of lending at DBN, Martin Inkumbi.
Envisaged to remain a significant contributor to the country’s economy, Humavindu said that the low number of applications submitted from the manufacturers is attributed to the fact that Namibia’s entrepreneurial culture is underdeveloped and most businesses are more involved in the trading of goods or services sector.
“The manufacturing sector is broad and includes deals related to value addition to products or raw materials,” he added.
Most of the projects approved for the sector were more on food processing, brick manufacturing, manufacturing of charcoal and cement production.
As part of ongoing efforts to address the gap, DBN has identified key areas in the sector.
“…namely manufacturing of non-metallic minerals, wood and furniture as areas it would like to provide finance for. Manufacturing in areas, such as paper, printing and publishing, chemicals, rubber and plastics are also opportunities identified in the sector,” Humavindu said.
Since, the inception of DBN in 2004, the bank has approved loans valued at NS 2,420.67 billion. The bank’s loan book, which is a reflection of the loans disbursed or taken up, currently stands at N$ 1.34 billion.