N$50m credit scheme to support women, youth and SMEs

Namibia’s unique risk insurer, the Namibia Special Risks Insurance Association (Nasria) and Bank Windhoek have partnered on a credit guarantee scheme agreement worth N$50 million.

This will see Bank Windhoek being the latest financial institution to implement the scheme.

This initiative aims to empower the youth, women and small and medium enterprises (SMEs) in Namibia by addressing the critical issue of limited access to credit.

The scheme provides much-needed financial support to aspiring entrepreneurs, fostering innovation, job creation and economic growth.

Nasria managing director John Uusiku says the insurance company has set out a strategic focus that looks to create a scope for broad-based growth within the insurance sector and contribute to the developmental ambitions of Namibia as a country.

He said last week that Nasria has demonstrated in the past that it can insure against special risk, while at the same time introduce innovative products that support financial inclusivity.

He said the Namibia Financial Sector Credit Guarantee Scheme is an innovation through which the company is encouraging more financial institutions to help SMEs achieve their goals through access to finance.

“The rationale behind the credit guarantee scheme is that there are SMEs with excellent prospects for success and viable business plans, but which lack the necessary collateral to obtain loans.

“Commercial finance institutions require the security of collateral to ensure their capital is preserved if an SME cannot repay their loans,” he said.

Uusiku said by ensuring credit granted to qualifying SMEs, the scheme substantially reduces the collateral requirement for qualifying SMEs.

“Upon being assessed as bankable and only lacking collateral, the SME can be considered for collateral cover of 60% of the principal loan amount. Nasria would provide this collateral,” he said.

Bank Windhoek managing director Baronice Hans commends Nasria for spearheading an innovative scheme that allows the bank to assess risk differently, while allowing SMEs access to be able to flourish in their businesses.

“This partnership expands our opportunity for businesses to access funding and address the much-needed gap of raising collateral,” she says.

Hans says Bank Windhoek is motivated to co-create more products of this nature.

“By so doing, we allow and assist Namibian women-led and youth-led businesses to participate in the economy’s growth frequently and to a larger extent,” she says.