Namibia: SME Bank Readies for N$630 Million Expansion
Namibia, July, 07 2014 -
Namibia's youngest banking institution, the SME Bank is readying itself for the N$630 million windfall from Treasury which is set to enable a new growth for small, medium, micro, and informal enterprises in the country.
This follows this year's budget allocation by its shareholder, the government of Namibia in the current Medium Term Expenditure Framework (MTEF).
The bank has revealed plans to expand its outreach to all the regions, where phase one will involve the opening of three branches in Katutura, Ongwediva and Rundu.
"The plans have already been finalised and we are now awaiting formalisation of the processes by the respective regulator, that is the (Bank of Namibia)," said chief executive officer of the SME Bank Tawanda Mumvuma admitting that like any new organisation, the SME Bank has not been immune from some teething challenges on banking infrastructure.
One such problem has been lack of own contribution towards cost of proposed businesses.
"Most applicants do not have viable or bankable business plans. Secondly, those already in business, do not have financial records to demonstrate a good track record."
But Mumvuma is satisfied with the repayment of loans to date, a move he attributes to tight monitoring and control measures on all borrowers.
"As you know, SMEs are traditionally and generally perceived as high risk. What they need is a developmental approach whereby they can be supported with medium to long term funding. That is what we seek to achieve, now that we are having institutional and public support from different sectors," he concluded.
Mumvuma says the Bank's great prospects have been buoyed by the fact that it is now gearing towards its 1000th client.
"In a one and half year existence, we now have close to 5 000 customers making bank deposits and are nearing our 1000th client on loan service. This is underpinned by the branch roll out. The Bank has plans to have representation in the long term in all 14 regions of the country. That the Bank has assisted over seven hundred clients since inception with a total value of N$40 million is evidence that we are stabilizing in terms of public confidence as demonstrated by the public support from depositors and institutional investors. The deposit base of the Bank and customer accounts are increasing at a good pace and we are quite confident that with our planned branch network the SME Bank will soon become "the preferred Bank for the SME sector in Namibia", which is the vision of the Bank," he said.
In addition, the SME Bank is now live on NamClear.
NamClear enables banks to use the cheque payment system and the Electronic Funds Transfer system, which the SME Bank has been outsourcing to other local commercial banks.
The SME Bank was founded by the Government of Namibia following the dissolution of the Small Business Credit Guarantee Trust (SBCGT) that was transformed into a fully-fledged Commercial Banking Institution.
The Bank provides special attention to projects of Small and Medium Size Enterprises (SMEs), and those catering to Rural Communities, Micro Enterprises and Previously Disadvantaged Individuals (PDIs). It has a full Commercial Banking Licence and thus offers banking services to individuals and companies that are not necessarily SME's, through Personal Banking (Retail), Corporate Banking, Treasury and Investment Management.