NamPost, the Development Bank of Namibia (DBN) and PostFin, a subsidiary of NamPost signed a tripartite finance agreement on 12 November, in terms of which DBN will finance PostFin's micro-lending service enabling PostFin to expand its financing services nationally.
DBN will advance a N$ 30 million line of credit to PostFin to extend loans of between N$ 1,000 and N$ 40,000 to micro entrepreneurs and individuals.
The PostFin micro-lending service has operated in Windhoek since 2010, and has extended many loans to date.
PostFin will expand the service in a managed fashion through NamPost branches, across the country. NamPost, through PostFin, has made it a priority to improve Namibians' access to finance, especially for people who reside in rural areas.
In terms of the agreement, PostFin will use the DBN credit line to finance small businesses, housing and education.
The micro-lending agreement builds on the existing relationship between NamPost and DBN. NamPost previously used DBN finance to implement electronic banking with biometric account management, which has substantially improved access to banking in Namibia, particularly in smaller centres and hard to access areas.
According to the DBN Head of Lending, Martin Inkumbi, the Bank endeavours to find delivery partners, particularly for the delivery of smaller loans below one million Namibia dollars (N$ 1 million), and to provide support to small businesses and micro-borrowers. NamPost is a logical partner in this sense, because of its extensive national branch network, which will result in making the service available to people in most parts of the country.
Inkumbi added that, "PostFin's expansion will improve access to finance for small business owners and other community members who will not need to travel to bigger towns and Windhoek for loans. DBN is especially excited with the project, as small entrepreneurs based in rural areas will have access to direct finance, which will enable them to operate and grow their small businesses.
"Projects that improve and diversify services to all Namibians, aid the DBN in fulfilling its development goals, as aligned to the government National Development Goals, to provide access to finance, in order to improve and upgrade their living standards and communities. The Bank would like to be more involved in these types of projects, looking at various sectors and offering people the opportunity to play a larger role in the economy," concluded Inkumbi.