FNB boosts small businesses with N$68 million guarantee
Arecently signed agreement between First National Bank and the French Development Agency (AFD) consists of a EURIZ portfolio guarantee of N$68 million to support FNB Namibia in financing high-impact Micro Small and Medium Enterprises (MSMEs). EURIZ is the guarantee facility created by AFD which targets the financially underserved MSMEs in the ACP countries.
The signing ceremony was held in Windhoek on 19 October 2021, in the presence of representatives from Proparco, FNB Namibia, AFD, the French Embassy and the European Union (EU) delegation to Namibia. FNB Namibia is a long-standing partner of Proparco (a subsidiary of the French Development Agency focused on private sector development) and AFD Group, having already benefited from two portfolio guarantees in 2011 and 2014.
Through this partnership, via a EURIZ guarantee, Proparco seeks to contribute towards FNB Namibia’s efforts to support Namibian MSMEs operating in key sectors such as agriculture, health, education and climate, as well as youth-owned SMEs, women-owned SMEs, and start-ups.
A significant proportion of the guarantee will focus on supporting those MSMEs operating in the agriculture sector, in an effort to contribute to Namibia’s food security objectives. The guarantee will be coupled with a technical assistance facility designed to provide the financial institution’s MSME customers with capacity building support.
Launched in May 2019 with the support of the EU and the European Development Fund, and the Organisation of African, Caribbean and Pacific States (OACPS), the EURIZ guarantee aims to facilitate access to credit for MSMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation. It also forms part of Choose Africa, the French initiative dedicated specifically to African entrepreneurs and MSMEs.
By working with local financial institutions, AFD Group contributes to strengthening financial markets and plays a counter-cyclical role by increasing funding for local economic actors so that they are more likely to overcome the consequences of the Covid-19 crisis. In doing so, the project promotes local private sector development for sectors and segments essential in achieving sustainable and inclusive economic growth. Therefore, it will contribute to SDG 1 (No poverty), SDG 8 (Decent work and economic growth) and SDG 10 (Reduced inequalities).
Speaking at the signing, Sepo Haihambo, Executive Officer: FNB Commercial, said, “Given our position as the leading financial services provider in Namibia, we understand that we have a responsibility to deliver both financial value and positive social outcomes for multiple stakeholders. These principles underpin the bank’s view that we must intentionally use core business activities, including our role in allocating capital to small business owners (particularly women), to add value to society. This partnership agreement is now in place to help fellow Namibians in MSMEs countrywide, to look to the future with enthusiasm and support.”