Development Bank of Namibia (DBN) and the Development Bank of Germany (KfW) have signed a loan agreement in which KfW will provide refinancing for DBN’s non-agricultural small business loan scheme
The loan scheme aims to form an integral part of Namibia's Ministry of Finance's “Economic Stimulus and Relief Package to Mitigate the Impact of COVID-19".
The interest-reduced loan amounts to approximately US$30.81mn. DBN will provide the actual loans to non-agricultural SMEs that have experienced significant losses of income as a result of the COVID-19 pandemic.
The relief measure is aimed at supporting cash flows and continued economic productive activities. The loans can also be used for investing into new business areas that help strengthening resilience of companies for future shocks. The loan is backed by the government guarantee, underscoring the resolve of the Government of the Republic of Namibia to promote access to affordable finance for SMEs, especially during these unprecedented times.
“The extension of this loan facility comes as a good shot in the arm for the SME sector at this point in time. It is complementary to the suite of support packages extended to the SME sector as the engine of economic recovery, growth, jobs and wealth creation,” stated Ipumbu Shiimi, minister of finance.
The DBN forecasts that the funding offers much sought financial relief to around 200 SMEs. The DBN will customise the loans based on individual enterprise needs. Industries such as tourism, hospitality, and transport and logistics, having experienced the largest loss of revenue due to lockdown related effects nationally, regionally and globally, will be prioritised.
The highly valued support will contribute to preserving continuity of SME business activities and build a foundation for recovery, said CEO of DBN, Martin Inkumbi. Although the Bank will, through its normal SME lending window give attention to start-ups, the overwhelming priority for this.
The new relief programme is part of the German financial cooperation and builds on COVID-19-related support provided via technical cooperation implemented by GIZ in partnership with the Ministry of Industrialisation and Trade and Ministry of Finance which targets start-up businesses as well as SMEs.
