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2022 Good Business Awards
The Development Bank of Namibia (DBN) hosted its prestigious 2022 Good Business Awards in Windhoek on the night of 3 November 2022. Officiated over by the Vice President, His Excellency, Dr. Nangolo Mbumba, the event was attended by leading lights in Namibia’s private sector.
The event delivered wins for land servicing and education, with strong showings for tourism, manufacturing and transport and logistics.
Winner of the SME category, Zealous Tutorial Centre provides tutorial services to grade 10 and 12 learners in Rundu, enhancing secondary school educational outcomes. Finalist Infinity Logistics operates in the transport and logistics sector, one of the sectors identified in NDP5 as being critical to Namibia’s economic sustainability and development. Finalist Blue-Chem Investments manufactures cleaning products in Walvis Bay. Manufacturing has been identified as an important sector for Namibia’s future economic activity.
Winner of the large enterprise category, Otweya Land Developers serviced land for the large neighbourhood development at Rocky Crest Extension 4 in Windhoek. Lack of serviced land is a barrier to economic activity, socio-economic wellbeing and formation of capital.
Finalist San Kaross Lifestyle Safari developed San Kaross Lodge at Daan Viljoen, near Windhoek. Tourism and hospitality operations such as San Kaross are major emplores and earners of foreign currency. Finalist and specialist educator International University of Management (IUM), prepares and equips managers for roles in Namibia’s public and private sectors.
In his welcoming remarks, Chairperson of the DBN Board, Sarel van Zyl said through its finance of sustainable enterprises, the Bank seeks to achieve a high degree of economic activity and resulting development impact, as the economy recovers, and in future as the economy bears fruits.
He noted that the first Good Business Awards took into consideration job creation, local sourcing, sustainable and innovative use of resources, sound administration of the enterprise and good governance. Those judging criteria for these awards remains the same, and the finalists and winners epitomise that.
In his keynote address, Dr. Mbumba said his message to the finalists and winners is one of encouragement and their presence is an indication of excellence. He described them as agents of development and highly valuable components in the enterprise ecosystem.
Describing the relevance of the Awards, DBN CEO Martin Inkumbi said good business consists of enterprises and initiatives that are appropriate to the Namibian economy, that satisfy demand in the market and that are well administered. Good businesses are also those that can adapt to changing circumstances and economic shocks, as we have seen in the last two years. Good businesses also use their resources to accumulate capital either to grow, to evolve or to buffer themselves against economic shocks.
He said the concept of good business is ideal however, it also challenges Namibia. Namibia has traditionally been a tied economy dependent on regional linkages. It is influenced by neighbouring economies through the economies of scale that those economies achieve and subsequent imports that tend to dominate Namibia. It is also influenced by regional economic mechanisms such as SACU and the SADC.
The counters to this, he continued, are firstly to develop greater local self-sufficiency, and secondly to develop greater export capacity. Implicit to this is the need for sustainable enterprises that will endure through the years, providing consistent supply of high-quality goods and services through the years.
Good business, he pointed out, requires development of entrepreneurial culture, at the level of the enterprise as well as at a national level. The Good Business Awards showcase the best enterprises financed by the Bank. They are sustainable, they satisfy needs in the market and the economy, and they are administered for long-term success. However, the finalists and winners also set examples for other businesses. By examining their models and practices, other businesses can learn what it takes to succeed.
The Bank also learns from its finalists and winners. They become a standard against which the Bank can gauge its borrowers, both in the application phase and in the support that it can offer to its existing borrowers, he concluded.
Development Bank to resume Good Business Awards
Development Bank of Namibia (DBN) Executive of Marketing and Corporate Communication, Jerome Mutumba, has announced the resumption of the Good Business Awards on 3 November 2022, with finalists and winners to be announced at the gala dinner on the same night at Safari Hotel.
The high profile Awards were last held in 2019, were suspended for two years due to Covid-19.
Mutumba said this year’s winners will come from the tourism and hospitality sector, private education, land servicing, manufacturing and the transport and logistics sector.
Talking about the Awards, Mutumba said that they have a twofold purpose. Firstly, they highlight enterprises that have an exemplary development impact combined with excellent administrative practices that contribute to viability and longevity of the enterprise. Secondly, they showcase the contribution that the Bank, through its finance, makes towards development and economic activity in Namibia.
As befits an event of this magnitude, he said, the keynote speaker at this years’ event will be Dr. Nangolo Mbumba, Vice President of the Republic of Namibia, who will confer the awards.
The finalists and winners were determined by a panel consisting of independent judges and experts in their fields from among Development Bank employees.
In previous years, the Bank also conferred an annual Innovation Award. Although the Award will not be conferred in 2022, Mutumba said he was confident that the Innovation Award would resume in 2023.
Talking about the quality of finalists and winners, Mutumba said that the standard is very high. Although there can only be one winner in each if the categories, all of the finalists are exceptional, and represent a win for the Namibian economy and the Bank, he concluded.
Development begins from the ground up at Auasblick Extension 1
Speaking at the launch of Auasblick Extension 1, a public private partnership (PPP) between Sinco Investments and the City of Windhoek, Development Bank of Namibia CEO Martin Inkumbi emphasized the importance of serviced land as a vital pillar for economic growth and activity.
Inkumbi said commercial lenders mainly focus on financing top structures, which consists of housing units which fall either in the of affordable or higher-end segments of the market. There is often a shortage of lenders willing to finance the development of bulk land infrastructure, and this is the gap DBN aims to fill.
Lack of serviced land, he said, hampers progression of home ownership and socio-economic wellbeing, as well as capital formation in families. The presence of serviced land is not just an asset accounted for in the present. It represents the promise of prosperity and economic activity for the future.
Firstly, Inkumbi explained, serviced land and houses can be used as collateral for businesses that are financed. Lack of sufficient collateral is an ongoing challenge in development of the Namibian enterprise ecosystem. By making serviced land available, the entire private sector economy is enhanced.
Secondly, land and houses have value that can be transferred between generations, as intra-generational transfer of wealth between living parents and children, or through inheritances as inter-generational transfer of wealth.
Thirdly, Inkumbi said, serviced land appreciates in value. This appreciation of value can be redeemed through resale.
Talking about the importance of serviced land for the capital, he said Windhoek, which is experiencing a shortage of serviced land and land expected to become part of the wealth of families in all income brackets. This shortage impacts the potential ability of the City to become a driver of economic activity.
Inkumbi went on to explain that all income brackets benefit from land ownership, proportionately to the value of the land. Thus, he explained, smaller parcels of land with a lower municipal value can be used as collateral in financing arrangements for smaller enterprises, while land with a higher value can be used as collateral for larger enterprises. The need for serviced land in higher income brackets is an often overlooked facet of enterprise financing.
A healthy economic ecosystem, he said, consists of an optimal number of small, medium and large businesses with linkages. In this way small enterprises become off-takers of large enterprise goods and services, and vice versa.
He pointed out that Development Bank plays an active role in finance and stimulus for land servicing. In this case, the Bank has approved finance of N$76,855 million for bulk infrastructure for phase one of the Auasblick extension, consisting of 281 erven.
In addition to delivering serviced land on which residential properties will be erected, there is a definite, immediate development impact. During the construction phase employment is created, construction enterprises have the opportunity to earn income and the building supply and manufacturing sectors have opportunities to benefit.
Inkumbi concluded by saying that the Bank is ready and willing to finance land development projects across Namibia, either by financing private developers, local authorities and or through the Bank’s PPP model and its win-win proposition and invited initiators of land development projects to make contact with the Bank.
Plato erven auction
The Development Bank of Namibia has responded to a query on the auction of erven in Rundu by a court-appointed liquidator. The auction takes place on 13 October 2022 under a liquidation order issued by the High Court against Plato Investments and North Eastern Construction Association (NECA) (the developer).
Jerome Mutumba, DBN Head of Marketing and Corporate Communication, indicated that the matter is no longer under the control of the Bank, and that it has no ability to influence the process as the matter is under the purview of the High Court and its duly appointed liquidator.
In terms of the order, the High Court-appointed liquidator is auctioning 42 serviced erven in Rundu with a reserve price of N$150,000 each. Forty erven have partially completed structures. Some community members have queried the reserve price, stating that it places the erven out of reach of Namibians and favours foreign nationals.
On investigation by the Bank, the liquidator has stated that there are 61 registered buyers for the auction, of whom only four are foreign nationals.
This indicates that there is significant demand and financial capacity of local bidders at the reserve price of N$150,000.
Further clarifying the issue, the Bank stated that the matter of the defaulting developers was initiated in the High Court in September 2019. This followed a lengthy period of engagement with the developer to remedy the situation, restructure the debt and enable the debtor to resume payments.
Despite the Bank’s engagement the debtors did not honour the settlement agreement, resulting in a court-ordered liquidation.
Business training for young professionals and artisans
The Bank's Mentoring and Coaching Unit has implemented a business management training programme to support young professionals and young artisans financed by the Bank.
- Find out about skills-based finance for young artisans, here...
- Find out about skills-based finance for young professionals, here...
The programme enhances business management skills. Training includes basic business management skills, including business planning, financial planning, costing and pricing, compliance, taxation, procurement, marketing and customer service, human resources, labor relations, and other business topics.
Speaking about the need for training, DBN Head of Marketing and Corporate Communication, Jerome Mutumba said that the young professionals and artisans are highly skilled and trained in their fields, but often lack business skills which places their enterprises in jeopardy. Training programmes are the best way to address the problem.
The training, provided free to the young DBN borrowers, is structured so that the entrepreneurs will not be away from the businesses for too long, and lasts for 6 days, twice a week for 3 weeks. It has been piloted in the Khomas region and will soon be rolled out to the Bank’s Walvis, Ongwediva and Rundu branches.
Finance for Windhoek substation
DBN has announced that it has provided N$155 million in finance for the City of Windhoek’s Khomas substation.
The existing 66kV transmission network that supplies Windhoek is reaching maximum capacity and Nampower’s Van Eck transmission substation has reached its physical and operational margins. Supply capacity to Windhoek is restricted to 160MVA so a 90MVA upgrade is needed to cater for forecasted growth in electricity demand for commerce, industry and households.
According to the Chairperson of the City of Windhoek Management Committee, Cllr. Illse Keister, the proposed Khomas intake substation will ensure additional capacity to support the forecasted demand.
The proposed site of the substation is north of Otjomuise Extension 10. The substation will be developed by the City of Windhoek and Nampower. Nampower will assume the responsibility of constructing and maintaining the substation. City of Windhoek will earn revenue through electricity tariffs from the increased capacity. Part of this revenue will be used to repay the loan to DBN.
The entire substation is valued at N$336 million, of which N$228 million is being contributed by the City of Windhoek. The City has already paid N$72 million from its own resources and the balance will be covered by a DBN long-term loan of N$135 million and a short-term loan of N$20 million to cover VAT.
Speaking about Development Bank’s role as financier, CEO Martin Inkumbi said, the loan will be invaluable in sustaining Windhoek households, commerce and industry for the coming years.
He said DBN has over the past few years financed substantial land and affordable housing development projects in Windhoek, consisting of, among others, finance of N$390.5 million for the Ongos Valley development which will deliver over 4,000 houses in phase one, finance of N$57.8 million for 257 erven in Otjomuise Extension 5, finance of N$107 million to service 274 erven in Rocky Crest, finance of N$76.5 million to service 287 plots in Auasblick Extension 1 and N$31.6 million for 79 houses in Khomasdal Extension 16.
The expected increase in the number of households over the next 5 years will result in increased demand for electricity, which will put pressure on the City's energy supply infrastructure, hence the need to support the expansion of energy generation and distribution infrastructure, Inkumbi concluded.
Development Bank, NIPDB formalize cooperation
Development Bank of Namibia (DBN) and the Namibia Investment Promotion Board (NIPDB) have formalized their cooperation with a memorandum of understanding (MoU) signed on 28 September 2022. The two development agencies have previously cooperated in the past, notably when DBN accompanied the NIPDB Know2Grow outreach programme, during which DBN introduced its products to SMEs in 26 towns.
Speaking about the need for cooperation, DBN CEO, Martin Inkumbi, said the Bank is a financing agency that is dependent on demand from potential borrowers. Although DBN promotes its finance and associated services, promotion of economic participation through enterprise activity is the specialist field of NIPDB.
The MoU, which focuses on SMEs, harnesses the capacity of both agencies to further develop the SME sector.
Speaking about the need for inter-agency cooperation, Inkumbi said there are multiple initiatives to develop enterprise, but these initiatives often replicate the work performed by others. This leads to replication of work and potential mixed messages. By combining forces and seeking synergies through cooperating agencies, economic policy can be executed more efficiently.
He cited for example, DBN’s implementation of the Credit Guarantee Scheme (CGS) which provides a collateral guarantee of 60% to SMEs seeking finance from participating commercial banks. He also mentioned a recent agreement with the Namibia Trade Forum (NTF) in terms of which Namibian enterprises will be assisted to further develop their products and services to prepare them for the market.
Dino Ballotti, NIPDB Executive Director responsible for MSME Development, Innovation and Acceleration, said the largest contributors to economic activity in successful economies across the world are Micro, Small and Medium Enterprises, and there is no difference to that of Namibia. MSMEs play a significant role in our financial development, yet they face real challenges in the form of lack of information and financial support.
Evidence demonstrates the scale and commercialization of the sector can be achieved through the development of smart partnerships, such as this one, which will further drive the MSME agenda and ensure that no one is left behind. Access to information and innovative practices that can scale enterprises remains fundamental where the excellent work of the Development Bank will only enhance the efforts of an inclusive, more competitive business environment.
Although Development Bank’s minimum loan amount is N$150,000 for registered enterprises- or N$50,000 for young professionals and artisans, it provides apex microfinance for on-lenders who provide enterprise loans in smaller amounts.
Small is beautiful. Jerome Mutumba, on informal and micro enterprise.
The recent focus on empowering informal and microenterprise is a necessary affirmation for further development of Namibia’s economy. Development of new market spaces, as well as ongoing management of and upgrades to SME parks as good omens for the future.
An examination of Namibia’s recent enterprise history shows three broad origins of enterprise start-ups. The first is the local start-up, typically an informal or registered, regulatory compliant micro-enterprise. The second is a South African adjunct, an enterprise which complements the South African parent. The third, most rare form is an international start-up.
Of the three the informal or formal micro enterprise is arguably the most productive for Namibia. A survey of large Namibian enterprises points to the local, micro origination of many of Namibia’s best-known brands and companies.
The roots of the successes and sustainability of these enterprises lie in their small, relatively low-cost beginnings, the persistence of their owners in learning, adapting and diversifying. Thus, by example and inference, to develop large, economically significant, and sustainable Namibian enterprises, a wide base informal or formal micro enterprises must be fostered.
However, the value of the progression from an informal enterprise to a large formal enterprise is difficult to predict, especially given that there will be attrition of the informal enterprises in particular.
The economic value of informal and micro enterprises becomes more apparent when evaluated according to current development needs.
Firstly, informal enterprise is a major employer. According to Tangeni Shindondola, Director of the Dynamic Informal Traders' Association (DITA), as reported in The Namibian newspaper of 15 February 2022. She goes on to note that informal enterprise becomes an employment provider in the event of retrenchments.
Firstly, informal enterprise is a major employer. According to recent findings by the International Labour Organisation (ILO), as reported in the Namibian pf 6 September 2022, 56% of Namibia’s workforce in employed in the informal sector. According to Tangeni Shindondola, Director of the Dynamic Informal Traders' Association (DITA), as reported in The Namibian newspaper of 15 February 2022, informal enterprise becomes an employment provider in the event of retrenchments.
Secondly, informal enterprise is known to be a sole form of income for many households, or augments household incomes, particularly where those households are in poverty or on the verge of poverty.
Thirdly, informal and microenterprises are important elements of the value chain as off-takers and distributors of goods and services. This is true of goods and services produced by large and medium sized enterprises, with attendant impacts on formal enterprise revenues and employment. Informal and micro enterprises also generate network business on a peer level, creating their own ecosystem.
To reap longer term benefits from the informal and micro enterprise sector, activities need to be viewed and planned in four phases.
Firstly, nascent informal enterprise needs to be nurtured and enabled. Secondly, those informal enterprises with potential need to be encouraged to transition to formalised, registered, regulatory compliant microenterprises. Thirdly, microenterprises need to be nurtured to the activity level of SMEs. Finally, the most successful SMEs need to graduate to larger enterprises.
What is obvious is that the process of growth of informal and micro enterprises requires support and inducements.
The first inducement is a welcoming approach to start-ups. This requires liberalisation of the regulatory environment for informal enterprises, and removal of early barriers. Although regulation is required, that regulation should be exerted gradually, post start-up on the basis of impact on the community as well as the level of activity of the informal enterprises.
A second phase will be required to induce formalisation of the informal enterprise to become a fully-fledged micro enterprise, including full regulatory compliance.
The shift from informal enterprise to registered microenterprise entails costs which must be offset, including taxation and regulatory costs. To reduce the immediate burden, the enterprise will be required to grow, which will come at an expense. This can be offset with short-term bridging finance for stock and regulatory costs, and longer-term mezzanine finance to grow the asset base. This might be paired with concessional interest rates and use of assets financed as collateral.
What is also apparent is that formalisation requires an augmented skill set to manage finance in a borrowing environment, as well as administer the regulatory aspects. This can be addressed with mentoring and coaching of the type envisaged by the Bank of Namibia’s SME Financing Strategy.
What is implicit to a policy that nurtures informal and microenterprises is the need for a suitable agency to administer and coordinate finance, and mentoring and coaching.
The further benefits of an agency of this nature are that it will set the standards for services, and act as a control against predatory providers of microfinance. In addition, it may become a reference point for conducive regulatory practices. Finally, it may become a repository of knowledge and a brains-trust for the informal and microenterprise sectors.
Development Bank of Namibia, by design, is intended to finance large enterprises in the first place, as well as SMEs. It does however provide finance through its Apex microfinance facility for qualifying microfinance providers. In this way, the Bank currently complements the development impact of microlenders.
As much as Namibia’s future depends on policy-based lending to finance renewable energy, serviced land, affordable housing and young entrepreneurs, it will also need to develop policy-based stimulus for informal enterprises and microenterprises.
CEO Martin Inkumbi to depart Bank, August 2023
The Board of the Development Bank of Namibia (DBN) has announced that Martin Inkumbi, the CEO of the Bank, will step down from his role in August 2023, at the end of his current second five-year tenure, and he did not seek reappointment after serving ten years in the role.
The Board has since commissioned the commencement of the recruitment process to ensure a seamless transition at the time of Martin’ departure.
During the intervening period, the Board will seek a potential successor in a transparent manner with the assistance of the external recruitment agency. The new candidate CEO will be identified and brought on board for a couple of months to shadow Martin Inkumbi during the remaining stretch and familiarise themselves with the Bank and ensure continuity.
The Board, through its chairperson, Sarel van Zyl, has expressed gratitude to Inkumbi for his distinguished service in leading the Bank and shaping its operations.
Inkumbi joined the Bank in 2006, and progressed through the ranks to be appointed Acting CEO in November 2012. His appointment as CEO was confirmed in August 2013.
On Inkumbi’s assumption of the role of Acting CEO in 2012, the Bank’s balance sheet stood at N$2.03 billion. In 2021, the balance sheet stood at N$9.47 billion.
In addition to growth, Inkumbi has been instrumental in effectively shaping the Bank’s structure and operations.
Among others, Inkumbi has led development and implementation of DBN’s risk management framework, as well as restructuring the Bank’s operations to encompass an SME Finance Department, and Investment Department and a Portfolio Management Department to manage borrowers, post-lending. In addition, he led implementation of the Bank’s Treasury unit and listing of the N$2.5 billion bond programme on the Namibian Stock Exchange.
N$8 million for rural youth enterprise
Development Bank of Namibia (DBN), Head of Marketing and Corporate Finance, Jerome Mutumba has announced that the Bank has provided N$8 million to finance 28 rural youth enterprises. A DBN cheque was handed to Deputy Minister of Sport, Youth and National Service to kickstart the 28 start-ups at ceremony officiated over by the Prime Minister, Hon. Saara Kuugongelwa-Amadhila.
Find out more about finance for young entrepreneurs, here...
Speaking about the significance of the initiative, the Prime Minister said the 28 enterprises are part of a wider initiative to provide funding to 121 rural youth enterprises. She said funding for youth enterprises is an important component of Namibia’s goal to achieve sustainable development, under the Fifth National Development Plan (NDP5). The Prime Minister added that the project aims to create 1,210 new, sustainable, permanent jobs.
DBN’s initial involvement consisted of business management training, for 407 young people from the 121 rural youth enterprises, an exercise that involved technical support to the tune of N$1.2 million. This exercise also involved helping the youth identify potential business ideas in their constituencies and developing business plans for such.
Subsequently the Bank has made available to the Ministry of Sport, Youth and National Service, N$8 million to finance the start-up of the 28 enterprises.
Speaking on behalf of DBN CEO, Martin Inkumbi, Head of SME Finance Robert Eiman said the Bank sees threefold value in the initiative.
Firstly, the Bank has as one of its goals provision of finance for young entrepreneurs. The programme is expected to be a seed for the future of Namibia’s economy. Youth enterprise will be the pool from which it draws its future prosperity and employment creation.
The initiative complements existing Bank programmes that provide skills-based finance to young professionals, young artisans and finance for other young entrepreneurs through its SME Finance and Investments departments.
Secondly, the Bank believes that rural enterprise is critical to the future of Namibian prosperity and food security. The fact that the beneficiaries are from rural constituencies will add to attainment of development impact in rural areas.
Thirdly, the Bank is seeking to finance agri-processing, an offshoot of manufacturing, as well as agri-industry which supports agriculture. The agricultural roots of many of the enterprises that will benefit from this initiative will foster secondary value adding to agriculture.
Development Bank has provided the technical capacity to initiate the programme as well as the funding. The disbursement and administration of finance for the 28 enterprises will be managed by the Ministry of Sports, Youth and National Service.
Jerome Mutumba concludes by urging young entrepreneurs to approach the Bank with sustainable business plans to apply for finance as SMEs or to apply for skills-based finance for young artisans or young professionals.
