The Namibia Chamber of Commerce and Industry (NCCI) has called on all financial institutions to consider restructuring loan agreements for affected businesses because of the adverse effects of Covid-19 to allow them to recover financially.
NCCI director and member of business rescue task force Amalia Schmidt were briefing northern businesses on how to apply for the N$500 million Covid-19 loan assistance.
She said some of the affected businesses, which have either been closed or experienced serious loss of income, have borrowed money in one way or another and are expected to honour their contracts with financial institutions.
“NCCI business rescue task force made similar calls to local authorities to review municipal rates and taxes imposed on the affected businesses – and allow them to recover,” she said.
Schmidt added that many of the businesses that are closed do not use municipal services currently, and it will only be fair to consider exempting these businesses for the period they are not using these services due to the closure of their premises.
She indicated the country is already facing economic challenges and high unemployment, and every effort must be made to preserve every job we have now or which could be created.
The NCCI engaged businesses that may need assistance to be provided with relief for businesses that have made a step back or had to close because of Covid-19.
She promised the chamber will do everything possible on behalf of its members to improve and recover their businesses.
She further explained the Covid-19 Loan Scheme would be provided through the four commercial banks, with a specific emphasis on the affordability of the loans provided.
“To qualify for the Covid-19 Loan Scheme, an SME must be adversely impacted by the lockdown, and it will be required to demonstrate financial distress as part of the application process, and demonstrate that it has insufficient normal borrowing capacity to fully fund its monthly operating expenses,” she explained.
The business must be a registered business entity, including sole proprietorships, and have an annual turnover not exceeding N$10 million.
She said the business must be in good standing with their bank before the onset of the Covid-19 pandemic in Namibia and be registered with the Receiver of Revenue.
A certificate of good standing with the Receiver of Revenue will not be a mandatory requirement.
However, the business is expected to comply with the tax obligations once its cash flow improves during the loan repayment period.
Most business people were unhappy with the loan scheme, with some expressing concern on how will they pay back the loan when they are already struggling to pay back existing loans.
– vkaapanda@nepc.com.na