The Development Bank of Namibia (DBN) has recorded a net profit of N$172 million for the financial year ended 31 March 2017, the bank announced this week.
The profit of N$172 million for 12 months compares to the 15-month profit of N$208 million achieved in 2016.
According to DBN Chief Executive Officer, Martin Inkumbi, the lender’s loans and advances grew to N$6.7 billion, up from N$3.8 billion in the previous year.
“The bulk of this will be redirected to lending, with portions set aside to maintain prudential requirement liquidity standards, for the Project Preparation Fund and for corporate social investments (CSI).”
The Project Preparation Fund (PPF) is deployed at the bank’s discretion, to assist projects with exceptional potential development impact to further prepare business plans and improve their sustainability, with N$2.7million disbursed from the PPF in 2017 to prepare projects in the fields of renewable energy, and affordable land and housing.
In total, the bank’s assets grew to N$7.8 billion as at 31 March 2017, compared to N$4.6 billion the previous year.
Inkumbi said the bank’s impairment ratio stands at 2.9 percent below the target of 3 percent that the bank imposes on itself.
“Impairments are delayed repayments, and do not constitute bad debts until the bank is forced to take legal action. The level is substantially lower than the seven percent benchmark of the Association of African Development Finance Institutions (AADFI),” the DBN CEO said.
Projects funded by DBN in 2017 are said to have created 2,197 temporary jobs and 1,607 new permanent jobs.
Of its approvals, N$894 million was allocated to previously disadvantaged Namibians, with N$257 million approved for women entrepreneurs and N$148 million for young entrepreneurs.
The bank, Inkumbi said, has also made strides towards addressing national issues, with N$436 million allocated to construct 736 housing units, and N$114 million approved for servicing of 498 erven.
Allocations to energy generation amounted to N$462 million.
The bank, however, said it had observed lower credit demand in some key economic sectors such as manufacturing and tourism, during the reporting period.
Allocations to the manufacturing sector for the period amounted to N$140 million compared to N$70 million in 2016, while the tourism and hospitality sector received allocations of N$62 million compared to N$208 million in 2016.
The bank’s cumulative investments in these two sectors, however, remain satisfactory at N$585 million for manufacturing and N$452 million for the tourism as at the end of March 2017.
The transport and logistics sector received allocations of N$2.8 billion.
These sectors were identified as key to economic development in terms of NDP4, and are still noted as key sectors in NDP5.
The DBN does not engage in direct lending to primary agricultural projects, but it does finance agro-processing businesses.