The Central Bank’s Small and Medium Enterprises Economic Recovery Loan Scheme has paid out N$85.9 to 80 SMEs across the country to allow them to continue operating while providing further impetus to the revival of the economy.
This was announced by the Bank of Namibia’s Strategic Communications and International Relations International Relations Director, Kazembire Zemburuka.
Zemburuka said the recently relaunched loan scheme’s goal is to assist small and medium-sized businesses (SMEs) in fostering the nation’s economic recovery.
“The loan scheme is designed to support small and medium-sized enterprises (SMEs) to promote economic recovery. It involves the allocation of N$500 million to eligible SMEs. As per the guidelines, SMEs can seek loans from N$ 50 000 to N$ 10 million. The loans are disbursed at a rate equivalent to the current prime lending rate, with a reduction of 50 basis points and less stringent conditions. The loans aim to assist businesses in paying for operational expenses such as salaries, rent and lease agreements, and contracts with suppliers, he said.
The SME Economic Recovery Loan Scheme is a government initiative introduced in partnership with several local banking institutions, including Bank Windhoek and the Bank of Namibia, to provide working capital to struggling SMEs.
In November 2020, the central bank launched a Covid-19 SME Loan Scheme with N$500 million accessible to small and medium enterprises through participating banking institutions.
However, since the scheme’s inception, only N$6.4 million, or 1.3 percent, was utilised for this purpose.
It was thus relaunched in February.
Zemburyka said the program was relaunched in response to the COVID-19 pandemic’s economic challenges and lingering effects, adding that it now plays a crucial role in supplying businesses in a variety of industries with accessible financing
“By providing much-needed capital, these SMEs are given a shot in the arm and have created employment opportunities for Namibians who would have otherwise been jobless in the aftermath of the pandemic and geopolitical storms, which gave rise to inflationary pressures. Since its relaunch, the scheme has garnered a significant response, with more than 200 small and medium-sized enterprises (SMEs) nationwide submitting loan applications through regional bank branches of participating commercial banks,” added Zemburuka.
Governor of BoN Johannes !Gawaxab said “The positive reception of the SME Economic Recovery Loan Scheme is a source of encouragement. It underscores the pressing demand for such assistance for small and medium-sized enterprises in Namibia. We are convinced that the provision of loans will significantly contribute to the revival of businesses. We are steadfast in our dedication to ensuring the scheme’s accessibility to eligible small and medium-sized enterprises nationwide.”
Earlier this month Bank Windhoek also disbursed N$50 million in support of the government’s Loan Scheme.
Last month the Development Bank of Namibia (DBN) announced its participation in the Loans scheme bringing the number of schemes on offer by DBN to two. The other scheme offered by the Bank is the KfW Bankengruppe (KfW) scheme.