The Development Bank of Namibia (DBN) has announced its participation in the Bank of Namibia (BoN) SME Economic Recovery Loans scheme.

Participation brings the number of schemes on offer by DBN to two. The other scheme offered by the Bank is the KfW Bankengruppe (KfW) scheme.

Highlighting the differences between the schemes, DBN Head of Marketing and Corporate Communication, Jerome Mutumba, says the BoN scheme is of a longer duration of 7 years, and the interest rate floats at prime -0.5%.

On the other hand, the KfW scheme is of short duration, with repayment to conclude by 31 October 2025. The KfW scheme offers a fixed interest rate of 5.925% with the first 12 months interest free.

Talking about terms for the schemes, Mutumba says that businesses that qualify for participation should be clear on the time that they will require to repay the loan amount. In the event of loans not being repaid in the periods specified in terms of the respective schemes, loans will be restructured to adhere to DBN’s terms of lending.

On the topic of qualification for the schemes, Mutumba stressed that the decision to finance applicants was solely at the discretion of the Bank, and subject to standards and requirements established in the application form for finance available at the Bank’s branches or on its website.

He went on to say that the BoN scheme will be available solely to existing DBN borrowers and said that each applicant for the scheme should speak to their individual portfolio manager. On the other hand, he said that the KfW Scheme is available to new borrowers with an existing business track record.

He urged enterprises to interrogate their need for the relief schemes. The schemes, he said, place additional debt obligations on borrowers, which makes it important for each borrower to assess the benefit of and returns to participation.

“It is vital that enterprises be able to use the schemes to recover and grow,” Mutumba stressed.

The Bank, Mutumba concluded, was put in place to support larger enterprises and SMEs with clear development impact. The implementation of these schemes requires beneficiaries of the loans to ensure that they further their goals and prolong their sustainability in the medium to long term.

In the photo: DBN’s communication manager Jerome Mutumba.