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On 17 December 2020, a loan agreement between the Development Bank of Namibia (DBN) and the Development Bank of Germany (KfW) had been signed. KfW provides refinancing for DBN’s non-agricultural small business loan scheme which forms an integral part of Ministry of Finance “Economic Stimulus and Relief Package to Mitigate the Impact of COVID-19”.
The interest-reduced loan amounts to approx. N$455 million (or 25 million EUR). DBN will provide the actual loans to non-agricultural SMEs that have experienced significant losses of income as a result of the Covid-19 pandemic. The relief measure is aimed at supporting cash flows and continued economic productive activities. The loans can also be used for investing into new business areas that help strengthening resilience of companies for future shocks. The loan is backed by the 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 Mr 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 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 Mrs. 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.
“Start-up Namibia”, for example has disbursed approx. 600 Startup Survival Grants (worth N$15 000.00 each) to formally registered startups not older than five years. While the GIZ-programme “Promotion of Business Advisory and Transformation Services” is offering a grant scheme “Pitching for Recovery P4R)” in which micro enterprises in all 14 regions have the opportunity to receive financial support and coaching for their ideas on how to recover their businesses. In a close cooperation with between GIZ and the Development Bank of Namibia (DBN), selected SMEs and companies from the tourism sector are also offered a supportive restructuring of their loans.
During the global COVID-19 pandemic, Germany has so far provided N$850 million to Namibian partners to fight the pandemic and to mitigate the respective challenges on livelihoods and businesses in Namibia. Beyond approx.. N$530 million that have been mobilized to support SMEs and Start-ups to support their business continuity and recovery, N$250 million was mobilized to support Namibia in mitigating the challenges of the COVID-19 pandemic in the conservation and tourism sector. This builds on more than N$70 million that have been dedicated to various COVID-19 related immediate support measures in ongoing programs, e. health and prevention measures in informal settlements and markets or public transport
Distributed by APO Group on behalf of The Embassy of the Federal Republic of Germany – Windhoek.Media filesDownload logo