Character of potential borrower influences lending decisions

The Development Bank of Namibia’s (BON), Communication Manager, Jerome Mutumba says the bank considers the character of borrowers and favours individuals with a high degree of visible confidence in their own business plans.

Mutumba added that the bank has the mandate to provide loans that satisfy the requirements of Namibian development and due to its limited resources and its accountability to various stakeholders; it has to ensure that its capital is preserved. “It also has to ensure that its capital grows, so that it can provide sustainable returns to the shareholder who has placed capital in the bank. In order to fulfil its mandate, the Bank appraises loans carefully to select the projects with the highest probability of success,” said Mutumba.

The Bank understands that it is not only making a lending decision on the basis of the business plans it receives but also on the character and abilities of the business owners and managers who are implementing those plans are equally important. “In essence the Bank makes two decisions.

Firstly, is the plan feasible? Secondly, is the project promoter able to implement and sustain the plan? Although the plan may be excellent, the project promoter has to display the hallmarks of excellence as well,” noted Mutumba. Mutumba further noted the seven factors that create positive impressions of project promoters which are Skills, Qualifications, Track Record, Realism, Confidence, Integrity and Trustworthy References.