Namibia’s SME sector is starting to openly flex its muscle with figures showing it contributes to approximately 12 per cent of GPD, as well as make up at least 20 per cent of the country’s 49% work force, yet access to funding remains the biggest concern to the sector, which has done well with loan repayments.
That said, all eyes have been on the much publicised SME Bank of Namibia which, more than a year after its first being considered, is still in the process of coming into being.
SME Bank Namibia Limited as the new institution is set to trade as, currently has until November this year to undergo final inspection and then subsequently be issued with a permanent license to commence business, Bank of Namibia spokesperson Ndangi Katoma confirmed on Friday.
According to Katoma, the BoN is currently awaiting the detailed submissions of the proposed directors who are to perform the necessary vetting and due diligence assessment, “since the names of the initial board member have been revised by the SME Bank Namibia”.
While refraining from disclosing the names and details of the prospective directors, Deputy Minister of Trade and Industry Tjekero Tweya recently disclosed that Agriculture, Water and Forestry Permanent Secretary Andrew Ndishishi will most likely serve as the bank’s chairperson.
Government will be the majority shareholder with 60 per cent ownership while private investors will take the lesser share, a decision reached when the new bank’s application was first reviewed in November last year.
Prior to that review which resulted in the increased Government shareholding, the Metropolitan Bank of Zimbabwe, the only other disclosed partner, was the more prominently known pushers of the SME Bank idea.
At present, the most notable source of income for the SME sector is the Development Bank of Namibia, which revealed earlier this year that in the first quarter of 2011, they approved a total of 56 loans worth around N$60.65 million to companies in the sector, 85 per cent of which went to BEE initiatives.
The bank gives loans of between N$150 000 and N$300 000 for start-up capital.
Asked what the difference in function would be between the services currently provided by other financial institutions to the SME sector, Katoma said this was a matter of strategic advantage and thus refrained from divulging any of the proposed bank’s business and strategic functions.
“As such, disclosure to the public or possible competitors may put such institution at a strategic disadvantage and may compromise its strategic outlook,” he said.