Africa-Press – Namibia. SMALL and medium enterprises (SME) and youths, who can provide around 40% collateral cover for funding under the Development Bank of Namibia’ credit guarantee scheme, can now approach Standard Bank to access funding.
Standard Bank Namibia (SBN) announced yesterday through the Development Bank of Namibia (DBN) that it has joined the First National Bank in partnering with the credit guarantee scheme (CGS). This means SBN will be funding viable SME projects and share the 40% risk/collateral with the entrepreneur, while the government covers 60% under the CGS.Standard Bank’s enterprise direct manager Felicia Jooste said the bank wants to see SMEs grow and thrive in difficult economic conditions.“We are determined to help our small and medium businesses navigate these difficult prevailing conditions, hence the reason we joined the credit guarantee scheme,” she saidAccording to her, SMEs are the lifeblood of the economy and employ thousands of people across various sectors. Jooste said the bank has undertaken various initiatives to support the country’s SMEs before. However, they have found the CGS a worthwhile undertaking to participate in because it has removed 60% of the collateral barrier for many emerging entrepreneurs, who do not own tangible or intangible qualifying assets to pledge to banks for capital.She said the CGS will not only help them grow as companies but also help them grow the country’s economy and alleviate many social challenges. Minister of finance Ipumbu Shiimi launched the scheme in August 2020 to provide 60% collateral cover for qualifying SMEs that apply for finance from participating commercial finance institutions.CGS caters to SMEs with viable business plans that lack collateral to obtain loans. Commercial financial institutions require collateral to preserve their capital in the event businesses fail to repay their loans. By insuring credit guarantees to qualifying SMEs, the scheme reduces the collateral requirement for qualifying SMEs by 60%. The participating financial institution identifies SMEs that qualify for the scheme based on the bankability of the business plan.Seeded with N$98 million from the government and the Bank of Namibia, the CGS is operated as a smart partnership of DBN, Namibia Special Risks Insurance Association and participating financial institutions.DBN chief executive officer Martin Inkumbi says he hopes to see all financial institutions lending to SMEs joining the scheme.Inkumbi pointed out that the national policy strives to create a conducive atmosphere to develop economic activity in Namibia through establishing a conducive environment for SME start-ups and growth.So far, The Namibian has confirmed the participation of FNB, meaning SMEs around the country can now approach the two banks for capital, or venture capital and various asset managers who have an unlisted space investment mandate.Email: [email protected]