Source: All Africa.
Original news wirehere.
Namibia, September 22 – The German government has provided seed capital amounting to Euro 2.3 million to establish the first formal microfinance bank in Namibia.
The new bank will be founded on the successful pilot project known as ‘Koshi Yomuti’ that was established in 2002 also with funding of Euro 236.5 thousand under the auspices of the German Technical Co-operation Agency (GTZ).
‘Koshi Yomuti’ has grown over the years and now serves about 5 500 clients in remote areas. Ninety-two per cent are women. The Namibian Government and KfW, on behalf of the German government, signed the funding agreement on Friday.
Mocks Shivute, the Permanent Secretary in the National Planning Commission, said the establishment of the bank came about through protracted negotiations. “[It] was conceived at the annual Namibia-German consultations held in June 2004, and was further consolidated by the agreement between the Government of the Republic of Namibia and the Federal Republic of Germany on Financial Cooperation signed on 31 October 2007.”
Initially the Micro-Finance Bank will be wholly owned by foreign investors, but Shivute said over time local investors would be allowed to participate, “which would be good in inculcating a sense of ownership among our people.”
Matthias Hansen, the Chargé ÄèAffaires of the German Embassy in Windhoek, said the establishment of the bank “forms part of a much broader financial sector development programme aimed at widening and deepening the Namibian financial sector.”
This, he said would improve access to financial services for micro, small and medium enterprises. “Adequate access to financial services is of central importance to foster broad-based social and economic development and thereby to sustain social stability,” Hansen said.
Micro-financing, he said, would contribute significantly not only to economic, but also to social development. The majority of Namibians, Hansen continued, did not have access to financial services offered by the country’s mainstream banking sector, which is an obstacle to the “development of micro-, small- and medium-sized enterprises and hence the development of a dynamic and diversified private sector within the Namibian economy”.
Turning to ‘Koshi Yomuti’, Hansen said, the business loans of this pilot initiative are standing at Euro 263.5 thousand with only 1 percent of the clients having defaulted. “Given the success of ‘Koshi Yomuti’ in the past six years, we expect that the strong growth of this pilot initiative can be sustained once it is transformed into a formal financial institution,” Hansen pointed out.
Shivute encouraged the clients of the new bank to promptly repay their loans to enable other entrepreneurs to benefit from the scheme, adding that this would enhance the sustainability of the bank.
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