DBN confirms N$450m for Covid-19 business relief
... tourism, hospitality, transport/logistics to be prioritised
Development Bank of Namibia (DBN) late Wednesday confirmed that as of Monday, 18 January it will launch a N$450 million facility for Covid-19 business relief loans.
Through a concessional loan agreement with the Development Bank of Germany (KFW), DBN will offer finance equivalent to three months up to a maximum of six months’ working capital for enterprises affected by Covid-19. The term of the loan will be a maximum of 60 months.
DBN forecasts that the funding will offer financial relief to around 200 SMEs. The bank will customise the loans based on individual enterprise needs.
Industries such as tourism, hospitality, and transport and logistics that have experienced the largest loss of revenue due to pandemic-related effects will be prioritised. The facility may also be used for diversifying into new business areas that should help strengthen the resilience of existing companies to future shocks.
These relief loans will be available to both existing DBN SME borrowers and to enterprises which are not yet clients of the bank, as long as these enterprises have been in operation for at least 12 months and meet certain qualifying criteria (information on the qualifying criteria can be obtained from the bank).
The business relief comes via the N$450 million concessional loan agreement between DBN and KFW. DBN will on-lend the money to Namibian SME enterprises that require bridging capital to carry them through the low-revenue earning period caused by the pandemic and those enterprises aiming to restructure business operations to best survive in the changing business environment.
DBN CEO Martin Inkumbi says it is hoped that the financial intervention will contribute to preserving continuity of SME business activities and to build a foundation for recovery.
Although the bank will – through its normal SME lending – continue to finance SME start-ups, the priority for the Covid-19 business relief loans will be the preservation of business continuity and jobs. Therefore these loans are targeted at existing enterprises.