A new microfinance company, Kongalend, has been launched in Windhoek, Namibia, to offer collateral-free loans to small and medium-sized enterprises as well as private households interested in purchasing renewable energy products. Loans between NAD 1,000 (USD 133) and NAD 2,500 (USD 332) will be issued not in cash, but rather through seven unnamed local partner companies that provide renewable energy technology.

According to Hon Calle Schletwein, the deputy minister of finance, “The new facility by Kongalend will help the country in addressing energy shortfalls as it offers promising alternatives to increasingly high energy costs…According to recent surveys, more than 106,000 households are unserviced by the national electricity grid.” Furthermore, according to another survey by the Ministry of Finance, approximately 50 percent of Namibians currently lack access to financial services. Therefore, Mr Schletwein suspects that there is a “huge market for Kongalend’s financial products.”

Kongalend has received an unspecified percentage of the Government Institutions Pension Fund’s (GIPF’s) Development Capital Portfolio (DCP), which totals NAD 1.8 billion (USD 243 million).

Specific examples of the technologies that can be purchased with the loans have not been released.

By Conner Brannen, Research Assistant

Sources and Additional Resources:

AllAfrica: “Kongalend Issues Collateral-Free Loans,” by Brigitte Weidlich, July 21, 2010: http://allafrica.com/stories/201007220580.html

Namibia Economist: “Kongalend finds solution to energy problem?” July 23, 2010: http://www.economist.com.na/index.php?option=com_content&view=article&id=21964:kongalend-finds-solution-to-energy-problem&catid=578:general-news&Itemid=60

New Era: “GIPF funding – Familiar faces queue up,” by Toivo Ndjebela, July 21, 2010: http://www.newera.com.na/article.php?articleid=12074

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