The Windhoek Observer business reporter Chamwe Kaira (CK) this week spoke to Development Bank of Namibia (DBN) CEO, Martin Inkumbi (MI), whose term of office was recently extended by another five years.
Inkumbi shared his successes and challenges at DBN during his first term in office as well as future plans to increase the bank’s presence across the country.
He also said plans to launch the much-talked about Infrastructure Fund, housed under the bank, have now been put on hold.
CK: How would you describe your first five years in office, what were some of the milestones achieved?
MI: It has been a time of learning and growth for me, but it has also been a time of delivery and achieving some milestones. I have learned one or two things and have grown as a person.
I have certainly gained a better understanding of development finance, people management, risk management, and strategic planning to mention, but a few.
The bank has also grown and matured in the execution of its mandate.
The bank’s balance sheet has grown from N$2.3 billion with loans and advances of N$1.7 billion at the end of 2013 to N$8.8 billion with loans and advances also growing from N$1.7 billion to N$7.7 billion as at 31 March 2018.
The funding structure of the bank has also improved, from being only funded with shareholder capital and now it has managed to raise two times the shareholders capital from external funders.
This is a milestone because it is a measure of lenders’ confidence in the future of DBN.
The bank has been able to list an N$2.5 billion bond program on the Namibian Stock Exchange (NSX). Through this bond program the bank has raised N$501 million to date, and this money has been on lend to business and infrastructure projects.
The programme fulfils the bank’s mandate to mobilise financial capital outside government’s contribution for economic development in Namibia.
The DBN bond programme has broaden Namibia’s capital markets, and also enables investors to generate returns from development.
CK: What are you plans for the next five years?
MI: My function is to execute directives from the bank’s board, so that will dominate the next five years.
Elements that are currently apparent are the further strengthening of the bank’s development impact while maintaining the bank’s sustainability, with an emphasis on its financial sustainability and good governance.
In terms of development impact, the bank will, as a matter of priority, be targeting employment creation and retention, infrastructure development and maintenance, and decentralisation leading to regional economic activity, finance for manufacturing, and transformation in the form of finance for Previously Disadvantaged Namibians, women and youth entrepreneurs.
The bank will also have to respond to emerging development issues. DBN has been a leading financier of renewable energy through independent power producer (IPP) projects.
In the past five years, the bank jumped feet first into the fray with the issue of land servicing and affordable housing. There is a need to develop lending products and other support intervention programmes for particularly youth entrepreneurs and SMEs in general.
DBN also need to increase its accessibility in the country. We are looking at establishing a presence in major commercial centres of the country.
There are additional opportunities and challenges ahead. These include the African Free Trade Area, the SADC Free Trade Area and emergence from the contractionary economic climate.
There is a shift emerging in the global economic balances of power. The bank will try to mitigate any challenges that emerge and exploit opportunities. The bank also foresees a need for more water infrastructure.
CK: Following the collapse of the SME Bank, there has been talk of the DBN taking over funding to SMEs. Can you please elaborate on this?
MI: The bank has resumed lending to SMEs and has established an SME Centre at its head office in Windhoek. The bank now accepts loan applications from SMEs and assists SMEs at its offices in Walvis Bay and Ongwediva.
The bank is seeing a steady flow of SME applications, and the portfolio of SMEs financed by the bank is now growing.
CK: The Infrastructure Fund was supposed to have been launched in October 2017. It is a year later and nothing has happened. What has caused the delay in launching the Fund?
MI: The idea of a separate Infrastructure Fund in DBN has been temporally put on hold. However financing infrastructure projects is and remains a priority for the bank.
Loans and advances to infrastructure projects make up more than half of the bank’s investment. So the bank is effectively a source of funds for infrastructure.
The bank’s ability to absorb additional infrastructure finance depends on the resources available and those it can mobilize. DBN is able to lend up to N$400 million to one single borrower, and this limit is growing with the growth of the bank’s loan and investment portfolio.
CK: What does the upcoming Africa Investment Forum to be hosted in Johannesburg by the African Development Bank hold for the DBN?
MI: Integration of African economies requires twin focuses on industrialisation and infrastructure. Development Bank of Namibia can participate in local initiatives, and has proven its ability to sustainably administer large tranches of finance provided by the African Development Bank, the initiators of the African Investment Forum.
The bank will seek opportunities to support investors in Namibia and will consider opportunities to administer financial capital which is directed to Namibia.