Small and medium enterprises (SMEs) who play the crucial role of promoting and transforming the economy have benefitted handsomely from the Development Bank of Namibia.
SME access to finance is crucial in fostering economic growth and development, and they are a vehicle for employment.
Due to risk aversion on the part of sources of finance, access to finance remains a barrier to growth for SMEs.
The DBN during 2019/2020 approved a total amount of N$279.3 million for 318 SMEs, which represents 24.5% of total approvals.
This was stated in the 2019/2020 DBN annual report presented in parliament on Tuesday by finance minister Iipumbu Shiimi.
Approvals facilitated the creation of 956 new permanent jobs and 1 696 temporary jobs during this period. SME lending activities spread across several sectors, including, business services, commercial property developments, general constructions, education, health, housing, land servicing, manufacturing, tourism and hospitality, transport and logistics, as well as wholesale and retail trade.
DBN CEO Martin Inkumbi stated in the report that N$150.9 million of the SME business activities approved by the bank in 2019/2020 were business services activities.
"These are generally contract-based projects, involving supplies and deliveries of several goods. SMEs financing also involved contracts in the construction industry. 78.2% of all the SMEs activities funded by the bank were contract-based. This included bridging finance to build classrooms, houses, health facilities, as well as upgrading and maintenance of roads," he stated.
It also included purchase orders to supply vehicles, materials as well as other goods and services.
SME financing also saw small businesses involved in other business activities such as manufacturing, land servicing, housing development, as well as tourism-related activities.
Regionally, //Kharas received the largest share of allocations for N$78.8 million, while Khomas received N$45.4 million in approvals and Erongo N$33.9 million.
SME projects with a national footprint were allocated N$30.7 million in approvals.
According to Shiimi, the relative budgetary allocations are subject to improvement over time; the government has made provisions to guarantee loans to micro, small and medium-sized enterprises through SME financing strategy and the youth skill-based lending facility implemented under the DBN.
He said the youth and entrepreneurs are free to use these facilities to showcase their talents and come up with innovative business solutions that will create employment and generate income.