THE Development Bank of Namibia (DBN) and the Development Bank of Germany (KfW) have signed a loan agreement of N$455 million which will finance non-agricultural SMEs which has experienced losses due to the COVID-19 pandemic.
The relief measure is aimed at supporting and improving cash flow and continued economic productive activities.
The loans can also be used for investing in new business areas that will help to strengthen the resilience of companies for future shocks.
The bank to bank loan is backed by a government guarantee, underscoring the resolve of the Government of the Republic of Namibia to promote access to affordable finance for SMEs, especially during these unprecedented times.
“The extension of this loan facility comes as a good shot in the arm for the SME sector at this point in time. It is complementary to the suite of support packages extended to the SME sector as the engine of economic recovery, growth, jobs and wealth creation”, stated Ipumbu Shiimi, Minister of Finance.
The DBN forecasts that the funding offers much sought financial relief to around 200 SMEs.
The DBN will customize the loans based on individual enterprise needs. Industries such as tourism, hospitality, and transport and logistics, having experienced the largest loss of revenue due to lock-down related effects nationally, regionally, and globally will be prioritized.
The highly valued support will contribute to preserving the continuity of SME business activities and build a foundation for recovery, said CEO of DBN, Martin Inkumbi. Although the Bank will, through its normal SME lending window give attention to startups, the overwhelming priority for this Covid-19 relief measure loans will be to preserve business continuity and hopefully preserve jobs.
“We are proud to able to support the Namibian economy with affordable access to credit for businesses in Namibia affected by the COVID-19 pandemic and by this, to support employment and income opportunities during and after the Corona crisis”, said Barbara Pirich, director of the KfW office Windhoek in Namibia at the signing ceremony.
Beyond its emergency support character, the credit line complements the existing German-Namibian development cooperation in the focal area of sustainable economic development and contributes to the promotion of broad-based economic growth supported by the private sector, highlighted Gerlinde Sauer, Counsellor for development cooperation at the German Embassy.
The new relief programme is part of the German financial cooperation and builds on COVID-19 related support provided via technical cooperation implemented by GIZ in partnership with the Ministry of Industrialization and Trade and Ministry of Finance which targets Start-Up Businesses as well as SMEs.