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DBN creates 2 620 jobs through small businesses

2021-09-23  Maihapa Ndjavera

DBN creates 2 620 jobs through small businesses
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In addressing the impact of Covid-19, which had a severe negative impact on local economic activity and employment, in addition to general adverse impacts on the domestic economy, the Development Bank of Namibia (DBN), through loans to small to medium-sized enterprise (SMEs) created 2 620 jobs in total.

In its 2020/21 annual report, DBN board chairperson Tania Hangula noted that despite the extraordinary circumstances, the bank continued to make various loans to large-scale borrowers, SMEs and under its skills-based facility for young artisans and professionals. 

“Total approvals amounted to N$999.3 million. Finance was approved for 31 SME startups and 180 existing SMEs. Jobs created amounted to 858 new permanent jobs and 1 762 temporary jobs,” stated Hangula.

She added the bank had to act swiftly and decisively to preserve the sustainability of its borrowers, offer business relief to enterprises not on its portfolio, as well as to continue to lend in the interests of economic activity. 

Hangula added the path ahead entails a preservation of existing economic activity, growth of economic activity and sustainability. 

“The tourism and hospitality sector are of particular concern, as it is both a very significant employer and a major earner of foreign exchange. The forward-looking strategy must be to enable tourism with accommodating finance. However, the restart of the global tourism sector is erratic and uncertain, which affects the ability and willingness of traditional inbound tourists to visit Namibia,” she explained.

The chairperson added the bank has a significant portfolio of investments in the sector and will be challenged to maintain tourism capacity while seeking means to enable its borrowers to begin to repay their capital and interest amounts.

DBN CEO Martin Inkumbi in the same report said the profit of N$116.5 million for 2020/21 was N$112.6 million lower, compared to N$229.1 million for 2019/20 period. 

“The impact of the reduction in the interest rates resulted in a reduction of N$80 million in profit. The continued downturn, further depressed by Covid-19, negatively impacted the growth and quality of the loan book, leading to an increase of N$29 million in impairment expenses,” he stated. 

Inkumbi continued that loans and advances of N$7.92 billion reduced by N$543 million (2020: N$8.47 billion). 

Excluding the National Energy Fund (NEF) and Neckartal Dam repayments, as well as the increase in impairments of N$190 million, the loan book increased by N$216 million. -

2021-09-23  Maihapa Ndjavera

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