By Staff Reporter
WINDHOEK, May 16 — The Development Bank of Namibia (DBN) is currently working towards the establishment of a Venture Capital Fund (Fund) as part of the national SME Financing Strategy. This initiative recognizes the significant role of SMEs in the Namibian economy and aims to enhance access to funding and capital for SMEs.
The primary objective of the Fund is to invest in identified SMEs that demonstrate strong growth potential but face challenges in securing loans or acquiring additional capital.
As an equity investor, the Fund will provide funding to established SMEs in exchange for equity. The invested capital will be utilized by the SMEs for growth requirements and operational capital. The Fund will generate returns through the appreciation of its investments in these SMEs.
To ensure effective governance, the Fund will be established as a trust under the Trust Moneys Protection Act 34 of 1934 and registered as an independent special purpose vehicle (SPV) in compliance with the Regulations of the Pension Funds Act 24 of 1956. The Fund will be overseen by a board of trustees, with a majority of independent members. The process of recruiting trustees will commence soon through an independent recruitment consultancy.
The Fund will adhere to relevant registration processes and requirements, including the regulations of the Master of the High Court and the Namibia Financial Institutions Supervisory Authority (NAMFISA).
Jerome Mutumba, Head of Marketing and Corporate Communication at DBN, expressed optimism regarding the Fund’s potential to catalyze transformation within Namibia’s SME sector. He emphasized that increased exposure to equity funding has the capacity to reverse prevailing trends and strengthen the SME sector.
DBN has previously introduced the Collateral Guarantee Scheme and spearheaded the National Mentoring and Coaching Programme as part of its efforts to support SMEs. The Fund represents the third and final component of the comprehensive SME Financing Strategy. – Namibia Daily News