DBN happy with micro financing
Development Bank Namibia (DBN) Communication Manager
Jarome Mutumba has reiterated that micro finance is bearing
fruits in the Namibian market.
In his latest analysis Mutumba said, “A walk through many of
the rural settlements, towns and cities in Namibia shows that
microfinance has a bearing on the lives of the people and it is
thriving. Microloans which are directed to productive activities in
the economy are essential.
“ An aunty who sells scones and fat cakes (vetkoekies) to send
her children to school or raise money for the seeds necessary
for the ploughing season has a developmental impact. These
kinds of economic activities should be encouraged and
promoted in order to uplift the socio-economic standing of the
majority of the citizens, who happen to be rural based,” he said.
He added that In response to the growing needs of the majority
of the citizens with no access to finance, the Development
Bank of Namibia (DBN) deemed it appropriate to come up with
an apex microfinance product to bridge that financing gap in the
“The product is designed for micro-lenders with clear intent
for on-lending to clients with developmental needs, not those
who simply require finance for consumption. The loans to be
extended should clearly be life changing, such as lifecycle
needs, personal emergencies such as sickness, and recovery
from emergencies such as drought and flooding, but in most
instances they should be offered enterprise start-ups and
bridging finance,” he said.
Mutumba added that the development of micro-lending as a
subsector of the Namibian financial sector is to be expected
as a natural step in the evolution of local finance and the DBN
wants to play its pivotal role in that regard.
“This is supported not only by demand, but also by the fact that
the administrative barrier to access finance can be lifted. Micro-
financing institutions that DBN will work with shall be registered
and regulated by the authorized body, to ensure that clients’
interest and rights are not abused. This offers comfort to DBN,
an institution that promotes responsible lending and borrowing
in the economy.
“Aspects such as microenterprise finance, education and home
building point to the fact that microfinance can have a very
beneficial development impact. This is compounded by the
fact that microloans are provided rapidly, so the impact can be
faster,” he said.
In order to address the various challenges, the Development
Bank has implemented an apex microfinance facility to provide
bulk capital to existing micro lenders.