The Namibia Special Risks Insurance Association (NASRIA) Ltd and Bank Windhoek have announced a partnership on a Credit Guarantee Scheme (CGS) agreement valued at N$50 million.
The initiative aims to empower all youth and women, in both small and medium-sized enterprises (SMEs) in Namibia.
According to NASRIA, the scheme focuses on providing much-needed financial support to aspiring entrepreneurs, fostering innovation, job creation and economic growth.
NASRIA Managing Director John Uusiku said NASRIA has set out a strategic focus that looks to create scope for broad-based growth within the insurance sector and contribute to the developmental ambitions of Namibia as a country.
He noted that a viable business plan is a key requirement with excellent prospects for success but lacking the necessary collateral to obtain loans.
Commercial finance institutions require the security of collateral to ensure that their capital is preserved if an SME cannot repay their loans.
“We have demonstrated in the past that we can insure against special risk while at the same time introducing innovative products that support financial inclusivity. The Namibia Financial Sector Credit Guarantee Scheme is one such innovation that we are encouraging more financial institutions to come on board to help SMEs achieve their goals through access to finance,” he said.
Bank Windhoek Managing Director Baronice Hans commended NASRIA for spearheading an innovative scheme that allows the financial institution to assess risk differently while allowing SMEs access to flourish in their business.
“This partnership expands our opportunity for businesses to access funding and address the much-needed gap of raising collateral. Bank Windhoek is motivated to co-create more products of this nature. By so doing, we allow and assist Namibian, women-led and youth-led businesses to participate in economic growth frequently and to a larger extent,” she said.
Meanwhile, Uusiku noted that the rationale behind the Credit Guarantee Scheme is that there are SMEs with prospects for success and viable business plans but lacking the necessary collateral to obtain loans.
Commercial finance institutions require the security of collateral to ensure that their capital is preserved if an SME cannot repay their loans.
“Upon being assessed as bankable and only lacking collateral, the SME can be considered for collateral cover of 60% of the principal loan amount. NASRIA will provide this collateral,” Uusiku added.
