Easy borrowing for youth SMEs

07 November 2019 | Business

The Development Bank of Namibia (DBN) will fund small and medium enterprises (SMEs) run by young people to the tune of N$108.5 million to help them grow their businesses.

This has been announced by finance minister Calle Schlettwein.

Under the initiative, which kicks off on 1 December, local entrepreneurs aged 35 and below can present their business ideas to the Development Bank for financing.

The funding facility is hosted by the ministry of sport, youth and national service in collaboration with the DBN. “It aims to facilitate the establishment of 121 youth enterprises in all constituencies, in line with the aspirations of the youth enterprise development sub-pillar of the Harambee Prosperity Plan,” the minister said. The facility will, as a start, provide funding to at least one project from each of the 121 constituencies.

The initial funding will total N$8.5 million, to be scaled up once bankable projects are identified and assessed, he said. Another project, the Credit Guarantee Scheme will be rolled out in collaboration with the Namibia Special Risks Insurance Association (NASRIA). “The scheme is of particular significance in addressing the binding constraint posed by the lack of collateral for qualifying SMEs. The facility will provide collateral cover for qualifying SMEs,” Schlettwein said. “It will commence at an initial size of N$100 million, for which N$2 million will be dedicated to the establishment of a database for SMEs. “The facility will target the youth, with a high proportion being accorded to the youth aged 35 years of age and below at the time of application, in line with the national definition of youth,” Schlettwein said.

It would commence with N$30 million in funding, he said.

Youth minister Erastus Utoni encouraged take-up of the schemes, saying it was a good opportunity.

“The money is there, colleagues at the constituencies, make us of this opportunity,” Utoni said.

He warned against wasteful spending of the grant money. “If you have been given the money, don't go and misuse that,” he said.

OGONE TLHAGE

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