PLANS to establish Namibia’s first bank to cater exclusively to the small and medium enterprise (SME) sector are well underway, Trade and Industry Minister Hage Geingob said.
Giving an update on the Ministry’s activities, Geingob said the Bank of Namibia (BoN) has received a licence application for the SME Bank and that the main issue remaining is to source the necessary capital. This will be done locally and internationally, he said.
The bank, once established to serve all 13 regions of Namibia, must act as a ‘catalyst for economic entrepreneurship in regions which were hitherto excluded from commercial sources of financing’, he said.
The SME Bank will also complement the efforts of the Ministry to provide affordable business space through its sites and premises programme, geared towards SMEs that can’t afford the rent of commercial leasing agents.
Geingob said the SME Bank will specifically target projects by women and the youth.
‘We should not overlook, if not underestimate, the economic value of the informal sector and SMEs, many of these run by women. Most domestic investment and job creation will come from SMEs.’
In the current global financial crisis, the sector needs tangible support, he added.
Meanwhile, the Development Bank of Namibia (DBN) has welcomed the intended establishment of the SME Bank.
‘There may be merit in having a bank that provides dedicated support to SMEs considering the challenges related to financing the sector,’ DBN Chief Executive Officer David Nuyoma said.
The existing Credit Guarantee Scheme Trust (CGST) will be transformed into a bank to address this niche in the market. Geingob said the SME Bank will not just rely on Government funds, as it will also take deposits.
Nuyoma doesn’t foresee any duplication of efforts between the DBN and the SME Bank, ‘as the need for SME financing is overwhelming and the challenges vast’.
‘There is definitely scope for a SME Bank in the market,’ he said.
The BoN remained tight-lipped on the progress of the SME Bank’s licence application.
‘We regard all applicants of banking licences as customers of the bank. Therefore, the BoN prefers to keep all information relating to banking licence applications confidential,’ Corporate Communications Head Helene Badenhorst said when approached.
jo-mare@namibian.com.na
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