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DBN happy with micro financing

Tue, 8 July 2014 23:44
by Online Writer
News Flash





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

economy.

“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.