Talking about the impact of skills-based lending for young artisans and young professionals, Development Bank of Namibia CEO Martin Inkumbi says the Bank has received 37 applications to the value of N$17,3 million since its launch in early December 2019.

 

The trial lending programme is designed to provide finance for young entrepreneurs with limited or no collateral, based on their qualifications and experience.

 

Inkumbi says the programme is a significant bridge between the current economy and the future. The Bank, he says, has the mandate to stimulate current economic activity with finance, but it also has the responsibility to empower a future generation of entrepreneurs, and this will emerge from young entrepreneurs who open businesses today.

 

Applications for borrowing, he says, place demands on applicants, however this is in the interests of the borrower and the future economy. Key among the demands is the requirement for a business plan and cash flow projection. These documents, if developed well, are not just the basis for loan approvals, but are also important annual management tools that contribute to the sustainability of the enterprise.

 

The process of establishing an enterprise is attractive, particularly to youth, Inkumbi explains, but cash flow projections and a well-developed business plan are fundamental to business administration. By referencing these tools on an ongoing basis, young entrepreneurs can plan their enterprise activities and respond to variable cash flows and changes in the business environment in a timely manner.

 

Inkumbi goes on to say that in addition to global best practices, the Bank has observed that its own borrowers, across all its portfolios, benefit from understanding and adjustment of cash flows and business plans. He adds that enterprise savings, which can strengthen the enterprise during business and / or economic downturns, are also highly dependent on a clear overview of cash flows.

 

Although the Bank sees the ambition of young entrepreneurs, as a socially responsible lender, it must ensure that the recipients of its finance are sustainable. An enterprise which fails due to lax administration not only places the borrower in financial jeopardy but also has a major impact on employees of the enterprise. A failed enterprise also has an impact on the national economy.

 

On the topic of drawing up the business plan and cash flow projection, Inkumbi asks young artisans and professionals to approach the Bank for advice on their applications. The Bank he says is accommodating in assisting young entrepreneurs with guidelines. He adds that the Bank has also simplified its application form for young artisans and professionals, and that the appearance of documentation required to accompany the application is not of importance, but that the substance od the business plan and cash flow projection is important.

 

Inkumbi urges young professionals and artisans to draw up their own documentation, rather than purchasing ‘off-the-shelf’ plans from external consultants. ‘Instant’ plans, he says, do not recognise the capability and capacity of the young entrepreneur and may be unrealistic.

 

On the topic of entrepreneurs who do not fall in the artisan or professional categories, Inkumbi explains that they can approach DBN for SME finance, and that the Bank has a long track record of youth finance under its SME portfolio.

 

In a recent address to students at the opening of the IUM 2020 academic year, Inkumbi also advised management students to develop enterprises by joining forces with artisans. The combination of management and artisan skills he said, will strengthen the ability of partners to sustain enterprises.

 

In conclusion, Inkumbi says, the Bank is open for young entrepreneurs. Although there is no instant wealth, perseverance and dedication are key to long-term growth and entrepreneurial success.