WINDHOEK: The Development Bank of Namibia (DBN)’s Chief Executive Officer David Nuyoma says the bank recognises the strategic role of food production, and thus fosters food production through the financing of agri-processing.
Nuyoma said in a media statement issued here on Tuesday that the bank’s funding of abattoirs, milling plants and dairy enterprises are testimonies in this regard.
The DBN does not engage in direct financing of micro-enterprises and small and medium enterprises (SMEs), but makes capital available for apex financing, which is financing for enterprises that lend onwards to micro-enterprises in a sustainable and ethical manner.
“This particular field of finance will be boosted by operations of the SME Bank, which will bolster capacity to deal with the priority,” said Nuyoma.
The SME Bank is yet to open its doors to the public.
The improvement of social development indicators has several aspects which receive attention from the DBN.
Nuyoma stressed that the bank has previously been able to report on the establishment of schools and health facilities, as well as a number of initiatives that indirectly support the requirements for the provision of housing, while reducing the costs of raw materials for building and making them more accessible across the regions.
The DBN also financed technology for NamPost Savings Bank, which, through the network of post offices, has increased its client base from 160 000 to 450 000. With that partnership, it has contributed very significantly to alleviating the pressing need for financial access.
“Adaptation to changes in the environment and climate has been an underlying factor in many of the bank’s activities. Finance for semi-purification of water in Walvis Bay was one of the bank’s showcase projects. An active interest in agri-processing and food production as a strategic requirement for the future is another,” Nuyoma noted.
He said the bank has adopted strategies, including a system of governance which ensures the integrity of the bank, and the values ensure that all members of the bank’s team know what the results of their activities and values should be.
These values are also instrumental in enabling the bank to identify circumstances in which it can adapt to fulfill the needs of development, as they change.
Another strategy was implementing mechanisms to support borrowers throughout the process, from the first application to the final payment of a loan.
This includes risk mitigation to ensure that applications which will lead to the bankruptcy of borrowers are avoided. It also entails business training for borrowers, and strategic interventions to turn around larger entities which are in danger of failing.
Nuyoma further noted that the bank adopted a strategy of opting for a rigorous principle of self-sustainability by operating on commercial principles that ensure that the bank’s resources continue to grow through interest levied on loans.
The accumulation was put back into use to finance yet more projects.
“Although unpopular and implemented with tact and broadmindedness, the combination of collateral requirements, capital repayment and interest have been shown in all circumstances across the world to spur borrowers on to success.
The alternative is capital which has to be replenished from the national coffers, and that is given without commitment on the part of the borrower,” he stressed.