By Business Reporter
ACCORDING to Jerome Mutumba, Development Bank of Namibia (DBN) Senior Manager for Corporate Communication, the bank is at an advanced stage in preparing for additional applications for SME finance, in the wake of the suspension of SME Bank’s operations.
Preparations include the recruitment of some former SME Bank business analysts, as well as the opening of a dedicated SME Centre, adjacent to the bank’s headquarters in Windhoek.
In addition to processing applications from SMEs, received from the bank’s headquarters, all DBN branches are also geared to serve SMEs.
Mutumba advises prospective applicants to familiarise themselves with the bank’s financial solutions, and its requirements, by visiting www.dbn.com.na, where the bank’s application form can also be downloaded.
Asked about the requirements for an application, Mutumba explains that the application has three core components, which form a business plan with: (1) a cash flow projection to demonstrate the financial viability of the project promoted by the SME enterprise, (2) the owners’ equity contribution and/or an indication of collateral, to demonstrate the owner’s commitment to the project, and (3) profiles of shareholders and managers, showing their skills and experience in fields relevant to the enterprise.
The bank may also require proof that the enterprise holds no environmental and social risks, and where there is such a risk, an environmental and social risk management plan should be in place to mitigate this.
Once complete applications are received, Mutumba adds, they are subjected to a due diligence process, to determine viability, and thereafter a financing decision will be taken.
Mutumba says that DBN finance is intended to have a positive development impact on the economy.
Aligned to strategic national priorities, approval of DBN finance rests on the sustainability of the SME business or project, and the ability of the business to repay the loan.
The bank, he says, wants to assure itself of the prosperity of the owner, the employees, the satisfaction of stakeholders, and a contribution to the national economy.
Mutumba says that the application process is designed to identify applications with the greatest development impact, including employment creation, economic participation for previously disadvantaged Namibians, enterprise activity in regions with low levels of economic activity and innovation.
The bank has previously stated that it is seeking opportunities to finance enterprises in the fields of transport and logistics, manufacturing, and tourism. It has also signalled its intent to provide finance for enterprises that address the shortage of affordable land and housing and the generation of electricity.
Commenting about products offered to SMEs, Mutumba says that, based on historical trends, the bank expects demand for asset finance and term loans for start-ups and expansion, but that it also avails operating capital, contract-based finance and performance guarantees. He adds that DBN tailors financing solutions, according the borrower’s needs.
Mutumba adds that although the bank is primarily focused on larger enterprise finance, it has a strong track-record in the field of SME finance, and is drawing on its accumulated skills, to fill the current gap in the market, and preserve the valuable contribution that SMEs are making towards the Namibian economy.
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