The Development Bank of Namibia (DBN) has strengthened its fraud reporting mechanisms, says Senior Manager: Corporate Commu- nication, Jerome Mutumba.
In terms of improved fraud reporting, the Bank has outsourced its reporting channels to local auditors Deloitte. This step was taken to ensure that potential whistleblowers feel that they can report fraud in a neutral environment. Says Mutumba, the Bank has become aware of the global phenomenon that whistleblowers are wary of making reports for fear of victimization. In order to adhere to global best practices, and in adherence with the new Whistleblowers Act of 2017, the Bank has adopted the new mechanism.
The benefits of the new system are that whistleblowers can report anonymously, in a neutral environment. This applies to the public who may believe that DBN resources are being misused, as well as to staff within the Bank.
Says Mutumba, the Bank is both ethical, and holds itself accountable for capital placed under its stewardship. In light of this, the Bank is taking proactive steps to prevent misuse of its funds. Not only is fraud reporting expected to expose attempted fraud, but it will also deter it by creating an environment that is hostile to abuse
On the topic of the types of fraud that the Bank is alert to, Mutumba says there are three forms at stake.
The first is corruption, which commonly consists of bribery, conflicts of interest, illegal gratuities (kickbacks) and economic extortion in which a service is withheld before payment is received.
The second is asset misappropriation, which consists of theft or misuse of assets, including cash. This might also include fraudulent disbursements or misuse of payments received from the Bank.
The third is statement fraud, in which a borrower or potential borrower understates or overstates assets in order to present a false ap- pearance which can influence treatment of applications and management of accounts after borrowing.
Mutumba goes on to say that the potential for fraud is well-managed by the Bank’s Risk and Compliance function, as well as with checks and balances during the application process. He adds that during the application process, assessment of proposals is done by three independent committees. Post borrowing, accounts are monitored for deviation from terms. In addition, various functions of the Bank observe borrowers and enterprises in situ.
The Bank is determined to hold itself accountable, and to achieve this, it will continue to review its mechanisms and adopt best practic- es as they become apparent, he says.
Mutumba concludes by calling on any member of the public who has evidence of any form of fraud perpetrated against the Bank to use the anti-fraud communication channels. More information on reporting can be found at www.dbn.com.na
Development Bank of Namibia (DBN) CEO, Martin Inkumbi, has announced that the Bank will provide N$1 million to sponsor the multidisciplinary MA in Development Studies, to be offered at the Oshakati UNAM campus.
Talking about the need for development at the launch of the programme, Inkumbi said development addresses the inequities of the past as well as preparing for future needs.
He said Namibia still has to address economic structural issues that have excluded the majority of Namibians from formal economic activity, and reduced them to subsistence activities. On the other hand, Namibia has forecasts of economic requirements brought about by population growth, and the need for competitiveness, locally, in the SADC, in other African economic blocs, and in global economies.
He went on to say that the Bank has to respond to national plans, such as the Harambee Prosperity Plan, NDP5, as well as other economic development directives from the government. Yet although its activities are directed by its mandate, the Bank has a responsibility to interpret the various needs and respond to them in a manner which provides the best possible outcome in terms of development impact.
The MA course, he elaborated, represents a deepening of the pool of knowledge with which the Bank will engage in future. Graduates and those who audit the lectures will add to the shared development knowledge base and will be able to contribute to formation of common goals. The graduates will also constitute a deepening of the pool of human resources for all development institutions in Namibia, as well as for the commercial sector.
Inkumbi said the Bank expects the MA in Development Studies programme to take a lead in the discipline of economic development and transformation, and to lead the way to new and innovative development thinking, strategies and plans that will improve the economy and give additional impetus to social development.
He continued by saying that the Bank expects the graduates to better understand the Bank’s decisions through understanding of formal theories and fields of development. This will lead to a greater understanding of DBN’s priorities in allocating finance.
In conclusion, Inkumbi commended UNAM and the initiators of the course, and called on them to also make segments of the course available as short courses to enhance the skills and business knowledge of entrepreneurs and of individuals occupied in specific fields of development.
As growth resumes in Namibia and with its trade partners, the Namibian transport and logistics sector will become a greater source of economic activity for the country, said Development Bank of Namibia (DBN) Senior Manager: Corporate Communication, Jerome Mutumba. On this basis, the Bank is initiating a drive stimulate the sector with finance.
The drive has a twofold purpose: to enable sectoral capacity building among existing enterprises, and to open the door to new entrants.
Mutumba said that the Bank expects increasing demand based on two factors.
Firstly, there is a growing need for movement of goods and commodities within Namibia. As towns and villages in Namibia improve their socio-economic statuses, increased activity will bring about a greater need for transport and logistics.
Secondly, SADC regional development is leading to improvements in potential for trade between countries in the region. The current level of optimism is illustrated by numerous trade corridors opening in the region, in addition to the Trans-Kalahari and Trans-Caprivi Corridors in Namibia.
In addition to direct financing to enterprises, the Bank is also financing a number infrastructure projects that have a direct impact on the sector, including road construction and rehabilitation, and the NEF fuel storage facility, which will extend Namibia’s fuel reserves. The Bank has also provided finance to Namport for cranes.
By supporting the transport and logistics sector, Mutumba explains, DBN is supporting the economic future of Namibia, its overarching drive for trade, and its ambition to become the regional transport hub of choice for its neighbours.
Talking about elements where DBN finance can be brought to bear, Mutumba said the shopping list includes warehousing, cold storage, bonded warehouses, dry ports, truck ports, fleets as well as other assets used on a day-to-day basis, such as containers, cranes and lifts.
Service stations, he said are currently classified by the Bank as retail operations, but DBN has provided financing for these enterprises as well. He also said the Bank provides finance for peripheral enterprises, such as repair facilities, and professional services required by the sector. DBN previously also inked an agreement with Namport to finance qualifying companies engaged in providing services to Namport.
Larger enterprises with complex financing requirements are offered structured financing packages by the Bank. These packages can consist of a mix of asset finance, commercial property development finance, and operating capital.
SMEs, defined by the Bank as companies with an annual turnover of less than N$10 million would be serviced either by the newly-established DBN SME Centre, or through its regional offices in Walvis Bay or Ongwediva.
Describing the range of products offered by the Bank, Mutumba listed installment sales agreements, term loans, property development finance and performance guarantees. He mentioned contract (tender) based finance in terms of which Bank finance is repaid by the contractor or entity awarding the finance. He added that the Bank also finances management buy-ins and buyouts.
In closing Mutumba said the current recession is lifting, and in order to make the best use of opportunities, transport and logistics enterprises should prepare plans now to make the best use of improved economic activity, rather than risking lags in competitiveness.
He concluded by urging the transport and logistics sector to make use of the Bank’s open door policy, and expect more from the road ahead.
The Development Bank of Namibia (DBN) Senior Manager: Corporate Communication, Jerome Mutumba, describes the Bank as a model for corporate social enterprise in the financial sector. The Bank he says, transcends stereotypes of financial enterprises, by reapplying profits in the interests of financial service delivery, while delivering growth.
The key distinction, Mutumba says, is that DBN has a core focus on long-term growth of its balance sheet, whereas private sector providers of finance are often constrained by shareholder requirements for short-term returns. He illustrates this point by saying that the Bank’s apportionment of its earnings consists primarily of reapplication of funds to additional lending for infrastructure and enterprises. The Bank also allocates returns to prudent financial reserves, and redemption of its bond.
The application of funds for lending has a multiplier effect on the DBN’s capacity to lend. This can be seen from the Bank’s approvals growth from N$110.7 million reported in 2005, to N$4.42 billion in 2017. The Bank’s balance sheet stood at approximately N$7.82 billion in 2017. Mutumba says that this should not just be seen as financial growth but also a multiplier of the number of projects, scope and size, in the fields of both enterprises and infrastructure.
Taken in total, Mutumba says, the track record of growth and the exercise of social purpose show that social enterprise can flourish in the financial sector. The benefit of this approach is seen in investor confidence, proven by subscribers to the Bank’s bond. Mutumba adds that not only does the bond add to the range of investment mechanisms within Namibia, but it also gives investors an opportunity to harvest returns from social enterprise.
Mutumba highlights several additional valuable applications of the Bank’s earnings. DBN, he says, sets allocates a portion of its earnings for various applications that can be seen as further investment in Namibia. This portion, he says, is set aside with the agreement of the Bank’s shareholder, the Minister of Finance.
The first portion is allocated to DBN’s Project Preparation Fund (PPF). This Fund is applied to projects that have potentially significant development impact, but do not yet meet the Bank’s requirements. Financial resources from the PPF are allocated to further analyse areas of the application to identify risks, and recommend mitigation measures. Through this mechanism, DBN is able to finance projects which might previously posed a threat to its sustainability.
The second portion is allocated to corporate social investment. Mutumba says that the Bank’s core business is to preserve its sustainability and grow through lending, however it took a decision to provide donor finance to projects which would not ordinarily qualify for finance through corporate social investment. Projects financed under this allocation are selected to alleviate poverty, develop education, develop skills, steward the environment, improve community health, and improve the business environment.
A third portion is allocated to the Innovation Award. This initiative provides a solution to Namibia’s need for innovation by identifying the most innovative enterprise entered for consideration by the public, and rewarding the winner with a combination of grant finance and loan finance. Capital provided by the Innovation Award is seen as seed finance.
Finally, DBN also hosts the Good Business Awards. These awards are used to highlight a combination of good business administration and development impact to the public, as a stimulus to administer enterprises well, and / or to apply for DBN finance.
Mutumba concludes by saying that the Bank is a case study, not only for social enterprise in the financial sector, but also for the means in which finance providers can allocate CSI and outreach budgets to secure their operations, and improve their operating environments.