Martin Endjala
The Ministry of Industrialisation and Trade (MIT) is set to table a national policy that will address SMEs’ credit access shortcomings.
This announcement was made last week in the National Assembly by MIT Minister Lucia Iipumbu. She was responding to a motion introduced in parliament in February by Maximalliant Katjimune, a member of the Popular Democratic Movement (PDM) party.
Katjimune’s motion calls for the National Assembly to investigate the bottlenecks around SME financing in Namibia to unleash greater access and economic potential for this sector of the economy.
This follows concerns raised by SMEs who are struggling to access loans from the Development Bank of Namibia (DBN) due to a lack of collateral.
Iipumbu stated that since the concern pertains mostly to collateral, the ministry will present the national policy on the informal economy, startups and entrepreneurship and its attendant Act soon.
“In the policy and law, we will work on extensions on the definition of collateral. Further, we can still rework and reintroduce formal funding mechanisms through consolidating our current grant efforts as government and private sector,” explained Iipumbu.
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She added that the ministry will also review the 2016 Micro, Small, and Medium Enterprises (MSMEs) policy to address some key impediments related to SMEs’ access to credit.
She mentioned that consultations on the informal economy policy will provide the ministry with guidance.
She urged stakeholders to attend consultations and provide input before the law is finalised. Iipumbu also explained that the ministry is working with the private sector, industry associations, and other stakeholders to address these challenges and leverage opportunities effectively.
Regarding access to credit, the minister emphasised that the problem has a dual aspect, as it involves not only access to credit but also the availability of appropriate credit.
She noted that during the period from 2019 to 2022, the ministry conducted private sector development surveys, which consistently showed that access to and the cost of finance remained a perennial problem, especially for MSMEs.
According to Iipumbu, despite these challenges, there are programs in place to address MSME shortcomings, such as the Start-up Namibia program, which is another intervention to promote and develop Namibian start-ups.
Earlier this year, DBN spokesperson Jerome Mutumba said the bank’s stance remains consistent in terms of lending to SMEs.
He explained that SMEs need to provide collateral to access loans while also stressing the importance of SMEs honouring their loan contracts for the bank to continue assisting others.
