Martin Endjala
Small and Medium Enterprises play an important role in the country’s economic stability and should receive more support to enable such businesses to keep contributing to job creation in Namibia, given the high unemployment rate.
This is according to First National Bank of Namibia (FNB) Head of Business Banking, Tomas lindji.
He says SMEs need support to enable them to help with the country’s economic recovery efforts. He noted that small businesses fulfill a vital function and therefore, a move to support them is a move to support the economic growth of the country.
He however stressed that access to finance remains a key constraint to SME growth, reiterating that it is one of the most cited obstacles facing SMEs in emerging markets and developing countries worldwide.
“A key area of our work is to improve SMEs’ access to finance and find innovative solutions to unlock sources of capital. Our approach is holistic, combining advisory and lending services to clients to increase the contribution that SMEs can make to the economy including underserved segments such as women-owned SMEs,”Iindji said.
He said that to this effect, FNB Namibia has paid out N$85 million, out of N$ 150 million allocated to the bank through the SME Economic Recovery Loan funds from the Ministry of Finance and Public Enterprises in collaboration with the Bank of Namibia.
FNB received a total 139 applications valued at over N$174million from SMEs nationwide and to date, the bank has successfully assisted 89 businesses with a total disbursement of N$85 million through the SME Economic Recovery Loan Scheme, leading to increased liquidity in their operations, job creation, sustainability of existing jobs, and economic growth.
Furthermore, FNB is currently evaluating credit for applications worth N$57 million, which consists of 38 customers, Iindji added.
“It is important to note that not all businesses that applied for the loan were eligible, mainly due to affordability and other factors. Only 12 clients were declined, with a declining value of N$31 million. FNB remains devoted to serving as a strategic partner in the economic recovery process and encourages entrepreneurs to approach our branch network for assistance. Additionally, let me also emphasise that proper cash flow management is crucial for eligibility for any lending activity,” lindji explained.
He further explained that the bank has updated its Value Proposition to the region, hosting stakeholder engagements with key regional representatives from the various municipalities, regulatory bodies as well as keen business people in the area.
Through these engagements, Iindji said, they have gained further insights into the needs of SMEs on a regional level, further allowing them to better support them, decentralize solutions and provide value beyond the funding.
Iindji maintained that if focus is put on these key areas, the bank can make faster progress towards building an entrepreneurial force that is well-equipped to take on the challenges that face Namibian small businesses.
