The Bank of Namibia says it has repackaged the Covid-19 SME Loan Scheme to address the unique challenges SMEs face in the post Covid-19 period and the ongoing geo-political tense environment.
The central bank’s governor Johannes !Gawaxab said this when speaking at the relaunch of SMEs Economic Recovery Loan Scheme in Windhoek yesterday.
The event was attended, among others, by representatives of the finance and public enterprises ministry, as well as officials of various participating commercial banks such as Bank Windhoek, First National Bank, Nedbank and Standard Bank.
“Under the auspices of the ministry of finance, the government launched the SME Financing Strategy in collaboration with the Bank of Namibia to water our tree’s roots and prevent the branches’ decay,” !Gawaxabsaid.
The Bank of Namibia, he revealed, has contributed N$80 million to the scheme currently being operationalised by the Development Bank of Namibia, and includes a Credit Guarantee Facility.
!Gawaxab stated the central bankhas provided relief to commercial banks, which made it possible to provide loan repayment holidays and other business assistance, resulting in a coverage of more than N$1 billion worth of loans.
He also noted that SMEs should prosper by actively participating in open, value-adding procurement processes in both the public and private sectors.
“SMEs should also reconsider and rethink the business models that worked for them in the past but will not work for them in the future. It makes sense to start planning how to take advantage of potential opportunities, particularly in developing sectors like green hydrogen, oil, and rare- earth metals, and not wait on the government and foreign investors,” he emphasised.
He said the sectors with strategic importance, such as non-renewable and renewable energy, should give top priority to local suppliers and the growth of local competencies throughout the value chains.
“ In terms of digital presence, SMEs should also prepare their companies to survive and sustain in a world that has been disrupted by the digital revolution – ignoring these trends will be at the detriment of future-proofing entities,” the governor said.
SME assistance is pertinent to support accelerated economic diversification and the creation of new jobs, especially for our youth in both urban and rural areas.
The deputy minister of finance, Maureen Hinda-Mbuende stated that SMEs also observed massive declines in revenues with expenditure remaining generally sticky, more financial space was needed. The repercussions have been acute, particularly in the tourism, manufacturing, and construction sectors, she said.
“This Scheme will never be a reality without your active participation, through your innovative business ideas you present to the commercial banks,”the deputy minister said.
Hinda-Mbuend urged all eligible SMEs to enquire with the participating banks for more details and on how to participate in this scheme. Taking full advantage of the scheme has been noted as an opportunity not only to make a comeback but to rise to the next level and contribute to rebuilding the Namibian economy, she added.