Windhoek-The Development Bank of Namibia (DBN) has reversed its decision not to provide funding for small and medium enterprises in the wake of apparent shenanigans at the SME Bank.
In late 2015 the DBN announced that it would not consider loan applications from enterprises or business projects with a turnover of less than N$10 million per annum.
However, the CEO Martin Inkumbi announced yesterday that the bank has been requested by its principal shareholder, the government, to consider loans from applicants with a projected turnover of N$5 million and above.
Said Inkumbi: “There is a new development in terms of the bank’s stance on SMEs. We have been requested to lower the requirements from loan applicants to an annual turnover of at least N$5 million and above, going forward.”
This development, according to Inkumbi, came into effect as from May 1, 2017.
Previously the bank announced in a press briefing that with effect from November 1, 2015 “the Development Bank of Namibia Limited will not consider loan applications from enterprises or business projects with a turnover of less than N$10 million per annum or a staff complement of between 31 and 100 employees.”
Queried as to whether or not the bank believed that lowering the scale to N$5 million and above would be sufficient, in light of the fact that not all SMEs get the chance to land projects that have the capacity to generate income in excess of N$5 million, Inkumbi did not mince his words when he said DBN is but one of many financial lenders.
He said this demarcation is not based on the amount to be borrowed but the income after borrowing. He further emphasised that in providing funding to projects, DBN does not only consider the financial viability of a project but the developmental impact such project is bound to have on the citizenry. He however added that all is not lost for those SMEs that fail to meet the N$5 million benchmark.
“DBN provides loans to other micro borrowers, who eventually provide loans to smaller entities – NamPost’s PostFin is one of them,” Inkumbi stressed.
Inkumbi made the remarks at an event which was held to announce the bank’s brand repositioning as well as to unveil its new tag line, ‘Expect more.’ In the past the bank sold its products under the motto, ‘Good business is good for development.’
The SME Bank, which has been charged with the responsibility of financing and supporting SMEs, has been mired by controversy in recent times.