NDB lends P445m in COVID-19 bail-out funds
National Development Bank (NDB) has disbursed P445 million from the P600 million Industry Support Fund (ISF) the organisation was allocated by government to help agriculture, tourism and general industry out of the COVID-19 slump.
Ministry of Investment, Trade and Industry commissioned the facility as part of the Economic Recovery and Transformation Plan in November 2020. About P1.3 billion was made available to firms and individuals through development finance institutes including NDB.
NDB CEO, Lorato Morapedi told BusinessWeek that the bank has already disbursed P100 million to agriculture and 97% of a P200 million allocation to the tourism industry. The balance of the funds has been lent to applicants in the general industry, which was allocated P300 million. The general industry category targeted companies with turnover ranging between P10 million and P50 million.
Morapedi said the NDB expects to have disbursed all the funds by March this year.
“The reception has been overwhelming and the rejection rate is very low ranging below five percent,” she said.
“The loans did not require security and the requirements were very minimal as government wanted to rather sustain these businesses from the closing shop during the pandemic.”
Morapedi, who is the outgoing CEO after being at the helm of the bank for 12 years, said the NDB realised that most of the businesses that did not qualify failed to provide their records.
“Record keeping is one of the biggest issues of the SMEs locally.
“You find that one needs to show how they have been doing so that we can assess the businesses’ capability because this is a loan,” she said.
Morapedi said the organisation had shared feedback with government as the financier, which has also emphasised the importance of having record-keeping for businesses.
She added that a waiver was granted for the agricultural sector, but applicants in this sector had requirements to follow which included showing their cropping plans and agricultural demonstrator to qualify.
Morapedi commended government for availing money under the ISF, which sustained businesses during the tough pandemic period.