The Development Bank of Namibia (DBN) has expressed satisfaction with its financial performance in an annual report for the financial year that ended 31 March 2017.
Speaking about the results, DBN CEO Martin Inkumbi says, the Bank’s loans and advances grew to N$6.7 billion, up from 3.8 billion for the 2016 period. The Bank’s profit was N$172 million. The bulk of this will be redirected to lending, with portions set aside to maintain prudential requirement liquidity standards, for the Project Preparation Fund and for corporate social investments (CSI).
The Project Preparation Fund (PPF) is deployed at the Bank’s discretion, to assist projects with exceptional potential development impact to further prepare business plans and improve their sustainability. In 2017 N$2.7 million was disbursed from the PPF to prepare projects in the fields of renewable energy, and affordable land and housing.
In total, the Bank’s assets grew to N$7.8 billion at 31 March 2017, compared to N$4.6 billion at 31 March 2016.
Asked about loan impairments, Inkumbi says that the Bank’s impairment ratio is 2.9%, below the target of 3% that the Bank imposes on itself. He points out that impairments are delayed repayments, and do not constitute bad debts until the Bank is forced to take legal action. He goes on to say that the level is substantially lower than the 7% benchmark of the Association of African Development Finance Institutions (AADFI).
In terms of its impact, Inkumbi says the Bank projects that its approvals in 2017 created 2,197 temporary jobs and 1,607 new, permanent jobs. Of its approvals, N$894 million was allocated to previously disadvantaged Namibians, with N$257 million approved for women entrepreneurs and N$148 million for young entrepreneurs.
The Bank, Inkumbi says, has also made strides towards addressing national issues. N$436 million was allocated to construct 736 housing units, and N$114 million was approved for servicing of 498 erven. Allocations to energy generation amounted to N$462 million.
For the financial period that ended March 2017, the Bank has observed lower credit demand in some key economic sectors such as manufacturing and tourism. Allocations to the manufacturing sector for the period amounted to N$140 million. The tourism and hospitality sector received allocations of N$62 million. The Bank’s cumulative investments in these two sectors however remains satisfactory at N$585 million for manufacturing and N$ 452 for the tourism as at the end of March 2017.The transport and logistics sector received allocations of N$2,804 million. These sectors were identified as key to economic development in terms of NDP4, and are still noted as key sectors in NDP5. The Bank does not engage in direct lending to primary agricultural projects, but it does finance agro-processing businesses.
Inkumbi continues by saying that largest regional allocation went to Erongo (N$2,968 million), followed by Khomas (N$524 million) and Omaheke (N$172 million). Projects crossing regions received N$120 million in approvals. In the densely populated northern regions, Oshana led approvals with N$143 million, followed by Omusati with N$130 million.