FNB/NASRIA Credit Guarantee Scheme launched
Empowering empower youth, women and SMEs
Traditional sources of financing are often inaccessible to young entrepreneurs due to their limited experience and assets, making them appear too risky to financial institutions.
First National Bank Namibia (FNB) launched the Credit Guarantee Scheme, a groundbreaking initiative in partnership with the Namibia Special Risks Insurance Association (NASRIA) that aims to empower youth, women, and small and medium-sized enterprises (SMEs) in Namibia. The event, which was held in Windhoek, attracted youth, women, and SMEs from various sectors and industries. The scheme addresses the critical issue of limited access to credit and provides much-needed financial support to aspiring entrepreneurs, fostering innovation, job creation, and economic growth.
During the launch event, Tomas Iindji, Head of Business Banking at FNB, emphasized the significance of the partnership: "FNB believes in smart partnerships that benefit the community, SMEs, youth, and women in entrepreneurship beyond collateral. This Credit Guarantee Scheme is a result of our collaboration with NASRIA. By sharing the risk and providing access to funding, we aim to unlock the great potential of SMEs for socio-economic development."
Traditional sources of financing are often inaccessible to young entrepreneurs due to their limited experience and assets, making them appear too risky to financial institutions. Additionally, their small size often makes them unattractive to investors and venture capitalists. The NASRIA Credit Guarantee Scheme fills this gap by underwriting loans through a risk-sharing approach, providing young entrepreneurs, women entrepreneurs, and genuine SMEs with the capital they need to start, run, and grow their businesses, said Iindji.
Initially set at a prudential limit of N$20 million, the scheme saw full utilization by April 2023, benefiting youth, women, and SMEs across various industries. Building on this success, FNB has negotiated a new prudential limit of N$50 million with NASRIA, resulting in a total loan amount of N$83 million being made available. This increased funding will directly support youth, women, and pure SMEs with an annual turnover not exceeding N$20 million, enabling them to sustain their operations and contribute to economic stability, Indji added.
Collateral
The FNB/NASRIA Credit Guarantee Scheme aims to go beyond traditional collateral models and provide SMEs with non-financial support. Conrad Dempsey, CEO of FirstRand Namibia, stressed the importance of this approach: "Our initiative recognizes that SMEs require more than just monetary assistance. By developing alternative financing mechanisms, we aim to empower youth and women entrepreneurs and help them turn their ideas into thriving businesses, thereby contributing to Namibia's economic growth and job creation." In addition to financial resources, the Credit Guarantee Scheme also focuses on creating a supportive ecosystem for entrepreneurship.
Dempsey further emphasized the collaborative nature of the scheme: "The success of this initiative depends on the collective efforts of stakeholders, including government bodies, industry leaders, and financial institutions. By working together, we can create an enabling environment for entrepreneurship, unlock the potential of our talented youth and women, and drive economic development."
During the launch event, the CEO of FirstRand Namibia also acknowledged and commended the support of the Namibian government, specifically the Ministry of Finance and Public Enterprises, for implementing the use of Cession Contract Monies to address challenges faced by SMEs. This collaboration further highlights the importance of partnership and collective efforts in driving economic growth.
FNB remains committed to providing its expertise and tailored financial solutions to clients with entrepreneurial aspirations. Through selective funding mechanisms such as Contract & Tender Finance, Purchase Order Finance, and Single Invoice Discounting, FNB aims to assist SMEs in fulfilling their contractual obligations and achieving growth. FNB invites talented youth, women entrepreneurs, and genuine SMEs with innovative ideas and businesses to visit their branches and engage with their relationship managers to unlock their potential.
During the launch event, Tomas Iindji, Head of Business Banking at FNB, emphasized the significance of the partnership: "FNB believes in smart partnerships that benefit the community, SMEs, youth, and women in entrepreneurship beyond collateral. This Credit Guarantee Scheme is a result of our collaboration with NASRIA. By sharing the risk and providing access to funding, we aim to unlock the great potential of SMEs for socio-economic development."
Traditional sources of financing are often inaccessible to young entrepreneurs due to their limited experience and assets, making them appear too risky to financial institutions. Additionally, their small size often makes them unattractive to investors and venture capitalists. The NASRIA Credit Guarantee Scheme fills this gap by underwriting loans through a risk-sharing approach, providing young entrepreneurs, women entrepreneurs, and genuine SMEs with the capital they need to start, run, and grow their businesses, said Iindji.
Initially set at a prudential limit of N$20 million, the scheme saw full utilization by April 2023, benefiting youth, women, and SMEs across various industries. Building on this success, FNB has negotiated a new prudential limit of N$50 million with NASRIA, resulting in a total loan amount of N$83 million being made available. This increased funding will directly support youth, women, and pure SMEs with an annual turnover not exceeding N$20 million, enabling them to sustain their operations and contribute to economic stability, Indji added.
Collateral
The FNB/NASRIA Credit Guarantee Scheme aims to go beyond traditional collateral models and provide SMEs with non-financial support. Conrad Dempsey, CEO of FirstRand Namibia, stressed the importance of this approach: "Our initiative recognizes that SMEs require more than just monetary assistance. By developing alternative financing mechanisms, we aim to empower youth and women entrepreneurs and help them turn their ideas into thriving businesses, thereby contributing to Namibia's economic growth and job creation." In addition to financial resources, the Credit Guarantee Scheme also focuses on creating a supportive ecosystem for entrepreneurship.
Dempsey further emphasized the collaborative nature of the scheme: "The success of this initiative depends on the collective efforts of stakeholders, including government bodies, industry leaders, and financial institutions. By working together, we can create an enabling environment for entrepreneurship, unlock the potential of our talented youth and women, and drive economic development."
During the launch event, the CEO of FirstRand Namibia also acknowledged and commended the support of the Namibian government, specifically the Ministry of Finance and Public Enterprises, for implementing the use of Cession Contract Monies to address challenges faced by SMEs. This collaboration further highlights the importance of partnership and collective efforts in driving economic growth.
FNB remains committed to providing its expertise and tailored financial solutions to clients with entrepreneurial aspirations. Through selective funding mechanisms such as Contract & Tender Finance, Purchase Order Finance, and Single Invoice Discounting, FNB aims to assist SMEs in fulfilling their contractual obligations and achieving growth. FNB invites talented youth, women entrepreneurs, and genuine SMEs with innovative ideas and businesses to visit their branches and engage with their relationship managers to unlock their potential.
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