Good news for small businesses is that Standard Bank Namibia has confirmed it has partnered with the Credit Guarantee Scheme (CGS) to provide collateral cover of 60% for qualifying SMEs applying for financing from participating commercial finance institutions. Standard Bank’s Enterprise Direct Manager, Felicia Jooste, said the bank has a genuine desire to see SME’s grow and thrive in difficult economic conditions.
“We are determined to help our small and medium-sized businesses navigate these difficult prevailing conditions, hence the reason we joined the Credit Guarantee Scheme”, she explained.
She said SME’s are the lifeblood of the economy, and employ thousands of people across various sectors. “We have undertaken various initiatives to support our SME’s, and we found the CGS to be an additional and worthwhile undertaking to participate in, not only to help them grow as companies, but also to help them grow the country’s economy, and by so doing alleviate a number of our social challenges,” Jooste noted.
Launched in August 2020 by Minister of Finance Ipumbu Shiimi, the CGS provides collateral cover of 60% for qualifying SMEs that apply for financing from participating commercial financial institutions.
The CGS caters for SMEs with viable business plans but lack collateral to obtain loans. Commercial finance institutions require collateral to preserve their capital in the event of businesses being unable to repay their loans. By insuring credit granted to qualifying SMEs, the scheme substantially reduces the collateral requirement for qualifying SMEs by 60%.
SMEs that may qualify for the scheme are identified by the participating financial institution in terms of their own assessment of the bankability of the business plan.
Seeded with N$98 million from Government and the Bank of Namibia, the CGS is operated as a smart partnership between the Development Bank of Namibia (DBN), Namibia Special Risks Insurance Association (NASRIA) and the participating financial institutions. Commenting on the CGS, DBN CEO Martin Inkumbi said he hopes to see all financial institutions lending to SMEs joining the scheme. He pointed out that national policy is striving to develop economic activity in Namibia through establishing a conducive environment for SME startups and growth.