CABINET has approved the establishment of a skills-based capital lending facility that is aimed to ensure increased access to affordable finance for potential and emerging entrepreneurs especially amongst the youth of Namibia.
Once operational then new facility will eventually be availed to artisans qualified as plumbers, mechanics, electricians and boiler makers but will also be for the benefit people with professional qualifications such as medical doctors, pharmacists, engineers and other university graduates.
The decision was taken during the latest Cabinet meeting held on 21 August 2019.
In this regard the Ministry of Finance was directed to oversee the facility, while the Development Bank of Namibia (DBN) will administer it. The new lending facility will not comply with some of the usual loan conditions, such as collateral and own equity contribution prescribed by the development bank.
The loan amount to aspiring entrepreneurs will range between N$150 000 and N$1 million, which the lenders will have to pay back over a period not extending five years.
Cabinet Committee on Treasury recommended that the facility will see artisans benefiting from a higher loan coverage of about 60 per cent than professionals with 40 per cent. The facility will cater for youth aged from 18 to 35 and people living with disabilities.
Loans will be extended to both start-up and existing businesses, provided that the businesses are viable undertakings.