Germany gives support for SME revival
07 January 2021 | Local News
Germany has supported Namibia in its endeavour to ensure business continuity and economic revival of small- and medium-sized enterprises (SMEs) to mitigate the impact of the coronavirus pandemic.
A loan agreement between the Development Bank of Namibia (DBN) and the Development Bank of Germany (KfW) was recently signed to this effect.
The low-interest loan amounts to approximately N$455 million.
KfW provides refinancing for DBN’s non-agricultural small business loan scheme, which forms an integral part of the finance ministry’s economic stimulus and relief package to mitigate the impact of Covid-19.
DBN will provide the actual loans to non-agricultural SMEs that have experienced significant losses of income as a result of the pandemic.
The relief measure is aimed at supporting cash flows and continued economic productive activities. The loans can also be used for investing in new business areas that help strengthen the resilience of companies for future shocks.
The loan is backed by a government guarantee, underscoring the resolve of the government to promote access to affordable finance for SMEs, especially during these unprecedented times.
“The extension of this loan facility comes as a good shot in the arm for the SME sector at this point in time. It is complementary to the suite of support packages extended to the SME sector as the engine of economic recovery, growth, jobs and wealth creation,” finance minister Ipumbu Shiimi said.
The DBN forecasts that the funding offers much-needed financial relief to around 200 SMEs.
The bank will customise the loans based on individual enterprise needs. Industries such as tourism, hospitality, transport and logistics, having experienced the largest loss of revenue due to lockdown-related effects nationally, regionally and globally, will be prioritised.
“The highly valued support will contribute to preserving continuity of SME business activities and build a foundation for recovery,” the CEO of DBN, Martin Inkumbi, said.
Although the bank will, through its normal SME lending window, give attention to start-ups, the priority for these relief measure loans will be to preserve business continuity and hopefully preserve jobs.
“We are proud to be able to support the Namibian economy with affordable access to credit for businesses in Namibia affected by the coronavirus pandemic and to support employment and income opportunities during and after the coronavirus crisis,” Barbara Pirich, KfW Windhoek office director, said.
Germany has so far provided N$850 million to Namibian partners to fight the pandemic and to mitigate its impact on livelihoods and businesses.