Martin Endjala
The Development Bank of Namibia (DBN) has announced its participation in the Bank of Namibia Small Medium Enterprise Economic Recovery Loans scheme.
Its participation brings the number of schemes on offer by DBN to two. The other scheme offered by the Bank is the Kreditanstalt für Wiederaufbau Bankengruppe (KfW) scheme.
This was announced by DBN Head of Marketing and Corporate Communication, Jerome Mutumba yesterday, who says the BoN scheme is of a longer duration of seven years, and the interest rate floats at prime -0.5 percent.
The KfW scheme is of short duration, with repayment to conclude by 31 October 2025. The KfW scheme offers a fixed interest rate of 5.925 percent with the first 12 months’ interest-free.
Mutumba explained that businesses that qualify for participation should be clear on the time that they will require to repay the loan amount.
In the event of loans not being repaid in the periods specified in terms of the respective schemes, loans will be restructured to adhere to the Development Bank of Namibia’s terms of lending.
On the issue of qualification for the schemes, Mutumba stressed that the decision to finance applicants was solely at the discretion of the Bank, and subject to standards and requirements established in the application form for finance available at the Bank’s branches or on its website.
Furthermore, he went on to say that the BoN scheme will be available solely to the existing DBN borrowers while encouraging each applicant for the scheme to speak to their individual portfolio manager.
Mutumba however, stated that the KfW Scheme is available to new borrowers with an existing business track record.
Enterprises are therefore urged to interrogate their need for relief schemes, as schemes place additional debt obligations on borrowers, which makes it important for each borrower to assess the benefit of and return to participation.
Mutumba reiterated that it is vital that enterprises be able to use the schemes to recover and grow, adding that the bank was put in place to support larger enterprises and SMEs with a clear development impact.
“The implementation of these schemes requires beneficiaries of the loans to ensure that they further their goals and prolong their sustainability in the medium to long term”, he said.
