The Development Bank of Namibia (DBN) launched the Microfinance Support Framework to serve as a funding mechanism aimed at providing loans to organizations that support development through inexpensive microcredit. DBN was established in 2002 through an Act of Parliament with the goal of improving citizens’ welfare and quality of life through increased economic activity and improved infrastructure. Through this framework, N$42 million, approximately USD 4.1 million, will be made available to credible microfinancing institutions to extend their products countrywide. Namibia’s President Hifikepunye Pohamba described the framework as an important initiative that falls directly in line with the DBN Act. Pohamba encouraged the business community to be more innovative in its approach, cautioning that, “It makes little sense for all of us to be shebeen owners,” referencing the country’s bars or pubs.
DNB’s Chief Executive Officer, David Nuyoma, commented on the timeliness of the framework stating that, “It comes at a time when the most economically marginalized Namibians are feeling the pressure of rising costs of living.” In 2005, the United Nations Development Programme’s Human Development report indicated that 34.9 percent of Namibia’s population was living on one dollar per day with another 55.8 percent living on two dollars per day.
Namibia’s economy is expected to experience rapid growth in the near future in the wake of the recently launched Southern Africa Development Community (SADC) Free Trade Area. The pact, signed by 11 of the 14 SADC nations, will exempt 85 percent of trade from tariffs and the aim is to fully liberalize by 2012. Nuyoma referenced this growth potential, stating that, “Although all the broader economic signals are promising, and major investments have been made in infrastructure and an enabling environment for large-scale industry, small scale enterprise is vital to ensure that Namibians are able to weather the present economic difficulties, and that they are able to grow alongside larger, more formalized sectors of the economy, gradually entering formal sectors in the medium to long term.”
By Iyanna Holmes, Research Assistant
Additional Resources:
CIA World Factbook: Namibia
allafrica.com: SADC Launches Long-Awaited Free Trade Agreement
The Namibian: DBN Launches Microfinance Framework
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