By Fimanekeni Mbodo
Namibia’s Cabinet recently approved the operational guidelines for the National Youth Fund (NYF), with an initial N$257 million commitment and plans for future annual funding.
The fund aims to address Namibia’s high youth unemployment rate, which when measured broadly stands at 61.4 percent, by providing capital to youth-led businesses.
This is a welcome and timely response to the urgent crisis of young people struggling to earn decent livelihoods and live with meaning in their country.
That is why it needs to be treated with the utmost care, so it does not become another well-intentioned government funding initiative that fails to achieve its purpose, like the SME Bank.
The SME Bank was created to close financing gaps for small businesses in Namibia but ended up collapsing, failing the very people it was supposed to empower.
The purpose of this article is not to criticise or dwell on the SME Bank failure, but to draw lessons from it that can strengthen the NYF and ensure it truly serves the country’s youth.
Set a Mandate and Stick to It
The first lesson is about setting clear objectives and honouring them. At the time of SME Bank’s collapse, seven large borrowers owed it roughly N$150 million, with one retailer alone owing N$34 million.
Those seven entities accounted for about 109 percent of the bank’s regulatory capital. A bank created specifically to support SMEs ended up funding large, established businesses and abandoning its true mandate.
The NYF must avoid this mistake at all costs. Its goal is to provide accessible funding to all Namibian youth, not just those in urban areas with connections or formal education.
The fund must reflect the country’s diverse needs, including the 44 percent of young people living in rural areas. Those realities should guide its criteria, disbursement, and communication.
A New Transparency Standard: Knowing Where the Money Is
One of SME Bank’s most damaging failures was its unregulated offshore investments of over N$200 million into Mamepe Capital and VBS Mutual Bank, much of which was never recovered. This was enabled by a lack of transparency and oversight.
This is why the NYF must set a new standard for transparency in the use of public money. A simple but effective measure would be creating a publicly accessible database of all the fund’s beneficiaries and the amounts they receive.
Globally, this approach is nothing new. The EU publishes agricultural subsidy recipients, and South Africa has disclosed companies and individuals who benefited from COVID-19 relief funds. That is the level of transparency needed at NYF to build trust, deter corruption, and ensure funds reach those who truly need them.
Funding in Stages: Capital Meets Incentives
To achieve the impact the fund envisions, it must avoid concentrating support in a few similar types of enterprises as SME Bank did. Small businesses in Namibia vary greatly, and funding should be tailored to meet the different stages and sizes they represent.
Just because a business lacks formal processes should not immediately disqualify it from accessing the fund.
Instead, this is an opportunity for a staged funding model that incentivises small businesses to put structures in place by offering smaller initial loans with clear growth conditions before unlocking larger amounts. This will allow small businesses to formalise and become bankable over time, creating stronger links to commercial banks and other financing options.
The NYF should also align with broader financial initiatives like the Development Bank’s planned venture capital fund to ensure youth entrepreneurs have a clear, supportive growth path.
Conclusion
The National Youth Fund is not just another programme. It is a promise to our young people that their dreams matter, and their potential will be supported. We cannot afford to repeat the painful lessons of the SME Bank. This time, we must get it right.
That means demanding transparency, staying true to the mission of serving all youth, structuring funding in a way that rewards growth and commitment, and enforcing real accountability. Let this fund stand as proof that we can learn from the past and build something that truly delivers.
*Fimanekeni Mbodo is an Entrepreneur and Independent Financial and Business analyst. He has a strong background in Finance and Business, with a BCom in Financial Accounting from the University of Cape Town and a Postgraduate Diploma in Business Administration from the University of Namibia.
