Standard Bank Namibia (SBN) has this month released about N$227m to Small and Medium Scale Enterprises (SMEs) and about N$119m to agricultural SMEs through its financing facility.
The bank’s financing covers a wide spectrum of sectors including manufacturing and developmental projects around the country.
According to SBN Credit Manager, Pieré Clarke the bank has advanced funds to 1900 SME clients and 1191 agricultural clients over a month’s period.
“Over 3358 SME clients excluding the agricultural sector as well as other individual clients who borrowed to enhance their businesses have benefited from the initiative last month alone. Generally we find that we have that we have a third more SME clients than we have traditional commercial clients,” said Clake.
The loan facilities cover a broad spectrum, such as the financing of an asset, such as a vehicle or printing machines, etc., to providing performance guarantees in respect of contracts they may have been awarded. It relates to new clients, increased facilities to existing clients, or a renewal of facilities previously granted.
Standard Bank’s SME financing plan gained momentum in 2006, and to date close to 10 000 SMEs and 5892 agriculture clients have been financed.
The August number marks a record financing for the bank in a single month, and SBN Head of Marketing Thaddius Maswahu, said the bank is eager to continue availing loan facilities to the SME sector and the numbers in both financing and clientele are expected to increase in the near future.
He added that the boost in dealing with SMEs came with the ongoing country-wide trade-fairs, where SMEs have been exhibiting.
The repayment rate for the SME clientele for SBN is currently pegged at two percent and Clarke notes that for the bank, “business owners are more likely to default on their loans than salaried persons. The default rate for business clients is 75% and we find that the SME clients are often the hardest hit by any economic down turn and as a result the defaults in this area have been higher on our experience.”