Namibia opens credit guarantee scheme for SMEs amid COVID-19

  • World
  • Wednesday, 19 Aug 2020

WINDHOEK, Aug. 18 (Xinhua) -- Namibia's Finance Minister, Iipumbu Shiimi Tuesday announced the commencement of the credit guarantee scheme for small, medium enterprises (SMEs).

The scheme will provide a collateral cover of 60 percent for qualifying SMEs applying for finance from participating commercial finance institutions.

According to Shiimi, the rationale behind the credit guarantee scheme is that there are SMEs with excellent prospects for success and viable business plans, but lack the necessary collateral to obtain loans.

Shiimi said that the scheme is a smart partnership between the Development Bank of Namibia(DBN), Namibia Special Risks Insurance Association(NASRIA), and participating financial institutions.

The smart partnership will be funded with 98 million Namibia dollars (5.6 million U.S. dollars) seed capital from the government and the Bank of Namibia.

According to Shiimi the collective efforts from all stakeholders will ensure that the challenges that the SME sector faces are addressed effectively, including overall inclusive economic growth and social development in Namibia, particularly during these seriously challenging times of economic downturn and COVID-19.

Meanwhile, DBN CEO Martin Inkumbi said the scheme is designed to provide widespread access to SME borrowers, and so participation was offered to private-sector lenders such as First National Bank and others.

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