The Equipment Aid Scheme under the Ministry of Industrialisation, Trade and SME Development, has been hit by budget cuts, just like many other Government programmes in recent months.
Head of Corporate Communications at the ministry, Liseli Mukubonda, said in an interview that Government has spent N$220 million on the scheme since it was incepted in 2009, but it now faces a N$10 million backlog in payments.
“As with many governmental programmes, it is afflicted by severe budget cuts as well as a backlog in payments amounting to roughly N$10 million. Our aim is to normalise the backlog of payments whilst hoping for an improved fiscal outlook to ensure financing of newer activities. Our budget for the current fiscal year had less than N$3 million for Emerging and Small Medium Enterprises support.”
Mukubonda said the ministry will only advertise for new applications once the backlog has been cleared.
Statistics provided by Mukubonda showed that since inception, the current scheme has assisted 2 757 entrepreneurs to acquire equipment and machinery to improve the quality of their products and services, productivity and competitiveness.
The ministry has also offered various other support schemes such as the Rental Support Scheme (which provides rental assistance for entrepreneurs in CBDs in major towns across the country).
Since 2013, around 41 MSMEs have been assisted under this programme.
The ministry, through the Namibia Development Corporation (NDC), has constructed over 49 SME and Industrial Parks, which accommodates 676 business operators.
“Most of the lease cost in the SME and Industrial Parks are priced at a heavy discount compared to market rates. The ministry also provides SME certifications which give SMEs preferences when it comes to tender adjudication. The ministry has issued 6 651 SME certificates of which 670 SME entrepreneurs were awarded tenders.”
Asked what the ministry had done to fill the gap in SME funding, following the collapse of the SME Bank, Mukubonda said they will continue to be guided by the MSME National Policy of 2016 in exploring alternative ways to support the sector and strengthening current programmes.
“In addition, the ministry will continue to work diligently with other governmental organs to ensure that our fiscal position improves thereby enhancing our ability to deliver more services.”
This comes as the Development Bank of Namibia (DBN) Chief Executive Officer, Martin Inkumbi, announced last month that the bank had resumed financing SMEs.
DBN will, however, only consider loans of N$150, 000 or more.
Commercial banks have also stepped up funding for SMES. In April, FNB Namibia launched its N$100 million Macro, Small and Medium Enterprises (MSME) special fund.
Nedbank Namibia has also launched its SME offering, which is set to equip aspiring SME owners with skills, including finance management and marketing, while Standard Bank is currently offering a tailor-made SME/Enterprise Bundle current account with unique features.