FNB to strengthen its support to MSMEs

PHILLEPUS UUSIKU

Proparco, a private sector financing arm of Agence Française de Développement Group (AFD Group), granted a EURIZ portfolio guarantee of N$ 68 million to support First National Bank (FNB) in its financing to high-impact micro, small and medium enterprises (MSMEs).

The signing ceremony took place in Windhoek on Tuesday, in the presence of representatives from Proparco, FNB Namibia, AFD, the French Embassy and the EU Delegation to Namibia.

FNB Namibia is a long-standing partner of Proparco, and AFD Group, having already benefited from two portfolio guarantees in 2011 and 2014.

In a media statement, FNB notes that Proparco seeks to contribute to the bank’s effort in supporting MSMEs operating in key sectors such as agriculture, health, education and climate, as well as youth-owned SMEs, women-owned SMEs, and start-ups.

A significant proportion of the guarantee will focus on supporting those MSMEs operating in the agriculture sector, in an effort to contribute to Namibia’s food security objectives. The guarantee will be coupled with a technical assistance facility designed to provide the financial institution’s MSME customers with capacity building support, the statement reads.

Applying

FNB did not specify the application procedures, nor did they outline the requirements the MSMEs should meet in order to access credit. Market Watch tried to reached out to FNB, however, efforts went unsuccessful.

Launched in May 2019 with the support of the European Union and the European Development Fund, and the Organization of African, Caribbean and Pacific States (OACPS), the EURIZ guarantee aims to facilitate access to credit for MSMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation. It also forms part of Choose Africa, the French initiative dedicated specifically to African entrepreneurs and MSMEs, the statement added.

By working with local financial institutions, AFD Group contributes to strengthening financial markets and plays a counter-cyclical role by increasing funding for local economic actors so that they are more likely to overcome the consequences of the Covid-19 crisis. In doing so, the project promotes local private sector development for sectors and segments that are essential in achieving sustainable and inclusive economic growth.

Speaking at the event, Sepo Haihambo, executive officer for FNB Commercial said, “given our position as the leading financial services provider in Namibia, we understand that we have a responsibility to deliver both financial value and positive social outcomes for multiple stakeholders. These principles underpin the bank’s view that we must intentionally use core business activities, including our role in allocating capital to small business owners, particularly women, to add value to society. This partnership agreement is now in place to help fellow Namibians in MSMEs countrywide, to look to the future with enthusiasm and support”.