First National Bank of Namibia has launched a Credit Guarantee Scheme. The groundbreaking initiative, in partnership with the Namibia Special Risks Insurance Association (NASRIA), aims to empower youth, women and small and medium-sized enterprises (SMEs). The event, which was held in Windhoek, attracted youth, women and SMEs from various sectors and industries.
The scheme addresses a critical issue of limited access to credit, and provides much-needed financial support to aspiring entrepreneurs, fostering innovation, job- creation and economic growth.
During the launch event, head of business banking at FNB Tomas Koneka Iindji emphasised the significance of the partnership. “FNB believes in smart partnerships which benefit the community, SMEs, youth and women in entrepreneurship beyond collateral. This Credit Guarantee Scheme is a result of our collaboration with NASRIA. By sharing the risk and providing access to funding, we aim to unlock the great potential of SMEs for socio-economic development”, he noted.
Traditional sources of financing are often inaccessible to young entrepreneurs due to their limited experience and assets, making them appear too risky to financial institutions. Additionally, their small size often makes them unattractive to investors and venture capitalists. The NASRIA Credit Guarantee Scheme fills this gap by underwriting loans through a risk-sharing approach, providing young entrepreneurs, women entrepreneurs and genuine SMEs with the capital they need to start, run and grow their businesses, said Iindji.
Initially set at a prudential limit of N$20 million, the scheme saw full utilisation by April 2023, benefiting youth, women and SMEs across various industries. Building on this success, FNB has negotiated a new prudential limit of N$50 million with NASRIA, resulting in a total loan amount of N$83 million being made available. This increased funding will directly support youth, women and pure SMEs with an annual turnover not exceeding N$20 million, enabling them to sustain their operations and contribute to economic stability.
The FNB/NASRIA Credit Guarantee Scheme aims to go beyond traditional collateral models, and provide SMEs with non-financial support.
Conrad Dempsey, CEO of FirstRand Namibia, stressed the importance of this approach. “Our initiative recognises that SMEs require more than just monetary assistance. By developing alternative financing mechanisms, we aim to empower youth and women entrepreneurs, and
help them turn their ideas into thriving businesses, thereby contributing to Namibia’s economic growth and job-creation.”
Dempsey stressed the collaborative nature of the scheme. “The success of this initiative depends on the collective efforts of stakeholders, including government bodies, industry leaders and financial institutions. By working together, we can create an enabling environment for entrepreneurship, unlock the potential of our talented youth and women, and drive economic development.”