Development Bank of Namibia (DBN) Senior Manager: Corporate Communications, Jerome Mutumba, has announced that the Bank will visit the regional capitals of north-eastern Namibia in order to stimulate demand for development finance. The visits begin in Rundu on 5 February, continue to Nkurenkuru on 6 February, and end on 9 February in Katima Mulilo.

Talking about the regions, Kavango West, Kavango East and Zambezi, Mutumba says they hold significant opportunity for development, in terms of infrastructure and enterprise, however he notes that demand for finance can be strengthened, based on demand from local authorities and entrepreneurs, respectively.

Mutumba says that calls for finance from the regions are low in relation to their potential for economic activity. He illustrates this with the fact that, since inception, there has been no call for finance for tourism and hospitality. This flies in the face of the combination of tourism and hospitality potential, and the Bank’s ability to provide tailored finance, which is flexible, and meets the needs of the tourism industry in other regions of Namibia. The same, he says, is true of other sectors.

In reaching out to the north-eastern regions, Mutumba says the Bank is not only showing its capacity to provide finance, but also challenging entrepreneurs to come forward with their business plans and translate them into operational opportunities with the aid of DBN finance.

The Bank, he says, seeks not only greater levels of economic activity spread across Namibian regions, but also a spread of sectoral activity across the regions.

The three regions, Mutumba says, are connected by the Kavango River, and this offers opportunities for coordination of activities which the Bank may finance. Tourism might explore and further develop the river as a travel route which can add value to tourism in the three regions. He also points to the riverine fishing industry, which is a source of fish regarded as a delicacy in many restaurants across Namibia. This, he says, indicates the need to explore potential for processing and packaging the fish.

Mutumba goes on to add that Nkurenkuru is a particular hotspot for development. As a recently proclaimed regional capital, the centre offers numerous opportunities for further development. This includes excellent possibilities for tourism and hospitality, wholesale and retail, and social enterprises such as private schools and private medical facilities.

On the topic of infrastructure finance for north-eastern Namibia, Mutumba says that the Bank is one of the central agencies tasked with contributing to development of infrastructure. In this light, he encourages local authorities in Zambezi, Kavango East and Kavango West, to approach the Bank.

The construction of a road, he says, stimulates wellbeing and enterprise at either end, and at all the centres alongside it. Servicing of land, and construction of housing, are important elements in the quest to improve social wellbeing, he continues. Local authorities can draw on the Bank’s expertise in the field of infrastructure financing as a pathway to development.

Mutumba concludes by saying that local authorities and entrepreneurs should view the Bank as a partner in achieving the goals of development of their respective regions. In order to develop the three regions, the Bank sees potential for cooperation and, consequently, expects more applications from the regions.

Development Bank of Namibia (DBN) Senior Manager: Corporate Communications, Jerome Mutumba, says the Bank is seeking opportunities to finance retail, wholesale and franchises. The Bank, he says, has a wide range of products that are geared to assist retail and wholesale operations to grow, as well as to enable new operations to open their doors.

Mutumba says that the Bank is particularly seeking retail expansion into regions with lower levels of economic activity. In addition to employment opportunities, retail in particular stimulates regional growth.

On the topic of the footprint of the sector, Mutumba says that large concentrations of retailers in larger centres, such as at Windhoek or the coast, experience diminishing returns as more outlets vie for the consumer dollar. By spreading to larger centres in regions which have been historically ignored as sources of enterprise growth, retailers can find new opportunities to grow. Group retail operations may also benefit from more frequent spending, and additional disposable income that would previously have been restricted due to the need to travel for shopping.

The Bank’s range of products, Mutumba says, is the optimum mix to support the sector. Products include finance geared for construction of retail premises and warehousing, vehicle and asset financing in terms of which moveable assets including vehicles financed by the Bank through instalment sale agreements (ISA), and term loans. Contract based finance is available to support tenders for provision of goods to state owned entities, the private sector, and NGOs, among others. Franchise finance is also supported by performance guarantees required by master franchisors.

On the topic of flexibility, Mutumba says DBN understands that there may be challenges faced by the enterprise. In order to address this, the Bank may tailor finance to ensure viability of the enterprise.

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.