Namibia’s unique risks insurer, the Namibia Special Risks Insurance Association (NASRIA) Ltd and Bank Windhoek have announced their partnership on the Credit Guarantee Scheme (CGS) agreement to the amount of N$50 000 000 (fifty million Namibian Dollars), which sees the Bank being the latest financial institution to implement the Scheme.
This groundbreaking initiative aims to empower youth, women, and small and medium-sized enterprises (SMEs) in Namibia by addressing the critical issue of limited access to credit. The Scheme provides much-needed financial support to aspiring entrepreneurs, fostering innovation, job creation, and economic growth.
Speaking at the partnership signing ceremony, NASRIA’s Managing Director, John Uusiku, said NASRIA Ltd 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.
“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.
“The rationale behind the Credit Guarantee Scheme is that there are SMEs with excellent 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,” he said.
Bank Windhoek Managing Director Baronice Hans commended NASRIA for spearheading an innovative scheme that allows the Bank 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,” she said.
Hans assured that 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 the economy’s growth frequently and to a larger extent,” she said.
Uusiku concluded that by ensuring credit granted to qualifying SMEs, the Scheme substantially reduces the collateral requirement for qualifying SMEs. “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,” he said.