MICROCAPITAL STORY: Pilot Project Koshi Yomuti to Become Namibia’s First Microfinance Bank with Funds from GTZ, FIDES, Incofin, Swiss Microfinance Holding and Investisseur et Partenaire Pour le Development

Koshi Yomuti, a six year old microfinance project whose name means “banking under a tree” will become Namibia’s first commercial micro finance bank with seed capital of Euro 2.3 million from the German Technical Cooperation (GTZ), a federally owned international cooperation enterprise based outside of Frankfurt, Germany. The grant money will be used to create the first purely micro finance banking institution in Namibia upgrading the Koshi Yomuti/Ohangwena Pilot Project to a commercial microfinance bank. The bank will be owned by foreign investors, including KfW (on behalf of GTZ), FIDES (Switzerland), Swiss Microfinance Holding (Switzerland), Incofin (Belgium), and Investisseur et Partenaire pour le Development (France).

The pilot project was initiated in 2002 through a partnership between the GTZ and Financial Systems Development Services AG (FIDES), a joint stock microfinance company based in Switzerland, within the framework of the German Development Cooperation assistance within Northern Namibia. The project was initiated to respond to results of a study funded by the GTZ which highlighted how a lack of access to financial services is a key constraint to personal economic independence for low income groups in Northern Namibia. It was created as a pilot project to test the feasibility of FIDES microfinance expertise in an environment specific to Namibia where other microfinance initiatives had failed, according to FIDES. While a study by the Bank of Namibia reported that many microfinance institutions in Namibia have failed in the past due to limited outreach, high default rates and low efficiency and profitability, Koshi Yomuti has grown since its establishment in 2002 to a client base of 5,500 and business loans standing at N$3million (USD 362 thousand) at the end of 2007. While Koshi Yomuti is registered on Mix Market, the most recent financial reporting dates back to 2003, when its total assets stood at USD 52 thousand and its debt/equity ratio was 110.02 percent.

The KfW is a German government run bank founded in 1948 and initially focused on financing for the reconstruction of Europe after World War II. It is owned by the Federal Republic of Germany (80 percent) and German Federal States (20 percent). In 2007 KfW Bankengruppe committed a total financing volume of EUR 87.1 billion (USD 122.5 billion) of which EUR 68.1 billion (USD 95.8 billion) went into lending and according to the MIX Market USD 922 million was allocated to microfinance investments. KfW’s financial ratios cannot be provided as the organizations financial statements are not available. As of December 2007, KfW received a rating of AAA from Fitch Ratings, Moody’s, and Standard & Poor’s.

FIDES is a joint stock microfinance company based in Switzerland. It was founded in 1996 and is a consultant company, investor and manager of microfinance initiatives. It created Swiss MicroFinance Holding in 2007 to own majorities in banks on a longterm basis. The financial statements of both organizations are not available.

INCOFIN began in 1992 and is a Belgian private social investment company, investing in microfinance initiatives and institutions. Its fund assets stood at USD 10.5 million as of 2006, USD 10.2 million of which was allocated to micro finance investments, as reported to the MIX Market. INCOFIN’s financial ratios cannot be provided as the financial statements are not available. Past MicroCapital stories on INCOFIN are available here and here.

Investisseur et Partenaire pour le Development was created in 2002 and incorporated in Mauritius. It is a private company established by a group of European entrepreneurs with backgrounds in private equity. In 2006 its total fund assets stood at USD 12.6 million, as reported to the MIX Market. Its debt to equity ratio is not reported. Further information can be found on the MicroCapital website.

By Lori Curtis, Research Assistant

Additional Resources:

AllAfrica: Germany Gives Seed Capital for Country ‘s First Micro-Finance Banking Institution

Bank of Namibia: Promoting Micro Finance Activities in Namibia

FIDES Group: About Us

GTZ: “Koshi Yomuti – Banking Under a Tree

KfW: “Our History

New Era: “Pure Micro Finance Bank Almost A Reality”

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