Maihapa Ndjavera
WINDHOEK - Last week Friday, the Bank of Namibia (BoN) availed an additional financial contribution of N$50 million towards the implementation of the SME Financing Strategy.
This was confirmed when the BoN and the Development Bank of Namibia (DBN) signed a memorandum of agreement for additional financial assistance. The implementation of the SME financing strategy was launched by the Minister of Finance, Calle Schlettwein, on 6 November this year. At that time, the ministries of finance and sports, youth and national service, in conjunction with DBN, unveiled a N$138.5 million SME financing strategy, which commenced on 1 December 2019, specifically aimed at enabling the youth to start or expand their businesses.
The SME financing strategy, for which funding is to be scaled up over time, is a bid to reduce the alarmingly high youth unemployment rate, estimated at around 45 percent, to boost low economic growth and to promote self-employment.
The core principle of the new MOA between BoN and DBN is to ensure the funds are utilised for the intended purpose and in an efficient manner to yield the required results of supporting SMEs in the country.
To accelerate the implementation process and achieve meaningful impact, BoN availed the additional N$50 million towards the overall strategy in the form of a donation to DBN. This brings the Bank’s total financial contribution to N$70 million.
At the signing of the Memorandum of Agreement, Governor of the BoN Iipumbu Shiimi said the Bank is determined to support the efforts by DBN, as host, in preparing for the establishment of the facilities under the SME financing strategy, and in ensuring the strategy is successfully implemented. In line with this stated commitment, the Bank availed an initial amount of N$20 million in 2018 toward the perationalisation of the strategy, in particular the Credit Guarantee Scheme facility, to compliment government’s
budgetary commitment.
“The Bank of Namibia remains committed to the development and upliftment of the SME sector of the economy. The Bank is convinced the sector is important for economic development, as it has the potential
to create employment and alleviate poverty,” added Shiimi. “The Development Bank of Namibia would like to extend its appreciation to the Bank of Namibia for the donation made toward the SME financing strategy.
The DBN has been hard at work over the past months to ensure all mechanisms are in place for the
operationalisation of the strategy. DBN has over the years prioritised its SME support efforts, and this additional funding will go a long way in unlocking the potential of SMEs,” said Hanri Jacobs who represented DBN in her capacity as acting CEO.
As coordinator of the Namibia financial sector strategy (NFSS), the Bank alongside DBN joined the government through the ministry of finance in spearheading the development of the SME financing strategy. The strategy, comprising three facilities, namely the Credit Guarantee Scheme, the
Venture Capital Fund and the Mentoring and Coaching Programme, was approved by cabinet at its meeting in June 2018.
Following this approval, the ministry of finance delegated the hosting and administration of these facilities to DBN.