WINDHOEK – The SME Bank, in conjunction with the Environmental Investment Fund of Namibia (EIF), will soon in this month October launch a Green Soft Loan Scheme offering heavily subsidized interest rates to encourage Namibians to invest in green technology.
The unique loan facility will also offer Namibians the opportunity to invest in renewable energy. The scheme will enable clients to access between N$10 000 and N$100 000, which is repayable over a period of three to five years.
Speaking to New Era yesterday, the SME Bank’s Chief Executive Officer, Tawanda Mumvuma, explained that loans would be granted at an interest rate of prime minus 4.25 percent, which effectively means that at the current prime rate clients will pay interest of five percent per annum.
“This means it is a heavily subsidized loan facility to encourage people to make use of it and to feel comfortable with the offering. This is a very competitive interest rate and we are looking at means and ways to alleviate the initial cost to make use of the facility,” remarked Mumvuma.
He explained that clients making use of the facility would be asked to put down a deposit of at least five percent but the bank would look at this requirement on an individual basis. In addition, clients making use of the Green Soft Loan Scheme will not be asked to provide collateral as security for the loan.
The Green Soft Loan Scheme is a credit facility that was established by the EIF to stimulate demand for the utilization of green technology in Namibia, especially for communities living in rural areas but it is also accessible to urban clients.
Access to green technology is expected to greatly reduce household as well as industrial energy consumption, ultimately resulting in less demand for electricity from the national energy utility.
“I think you will appreciate that environmental issues are coming to the fore. As a nation I think we need to move away from some of the energy sources we have been using and move towards renewable energy. In Namibia one of the energy sources we have been underutilizing is solar energy and this is one of the main targeted renewable energies we would encourage people to embark on,” said Mumvuma:.
The EIF is a statutory body created by an Act of Parliament (Act No 13 of 2001).
While only in operation since February 2012, the EIF’s history dates back to Namibia’s Green Plan of 1992. This plan outlines the need to create a financial institution that would channel funding in support of conservation and environmentally sustainable activities, which are the core mandates of the Ministry of Environment and Tourism.
According to information received from the EIF, it continues to develop and explore different financing instruments to overcome major bottlenecks to financing environmental investments.
By Edgar Brandt