NAMIBIA's first micro-finance bank is a reality after the Bank of Namibia (BoN) yesterday granted Fides Bank Namibia a permanent banking licence.
"Fides Bank is now permitted to engage in formal or informal banking activities with any person in Namibia, especially soliciting public deposits," BoN said in a statement.
Financial Systems Development Services AG (Fides) has start-up capital of N$15 million, and will provide financial services to Namibians who are economically active, but who do not have a fixed salary.
The bank intends to concentrate on savings, credit and transfer services for small entrepreneurs and self-employed in rural and urban areas, but will not provide consumer lending and payroll deduction.
In five years, Fides Bank Namibia intends to have seven branches, employ 100 people, have about 23 000 micro and small entrepreneurs and boast an asset base of N$207 million.
The currently shareholders are the German Development Bank with 24,9 per cent, French financiers I&P with 22,45 per cent, and Belgian-based social investors Volksvermogen NV with 16,67 per cent. The remaining 35,98 per cent is owned by Swiss Microfinance Holding (SMH), Fides's investment holding company.
"The shareholders of Fides Bank Namibia are socially responsible investors, who intend to create, beyond financial return, development impact by facilitating the creation of employment and income," the bank said in a statement when it was granted its provisional banking licence last August.
According to the statement, the bank will be built on the pilot initiative that has been implemented during the last years by Fides with the support of the German Development Cooperation (GTZ).
"With more than 20 000 credits allocated to micro-entrepreneurs, mainly in rural areas in northern Namibia, the pilot programme enabled the development and implementation of appropriate financial products and services for this clientele largely underserved up to now."
The bank aims to provide "reliable and sustainable solutions to the key issue of facilitating economic development in Namibia by creating access to financial services for people who were up to now excluded from the formal banking system, and to create an offer of financial services for small and medium enterprises (SMEs). It will target in a first step the rural communities of northern Namibia and gradually reach out to other rural, urban and semi-urban clients throughout Namibia," the statement said.
Thomas Lendzian, Fides project manager in charge of the creation of the micro-bank locally, told The Namibian in August that the German Development Bank is the only shareholder with no plans of sticking around for the long term.
The overall strategy of the Development Bank is to kick-start the project. Once it is established, they take their money elsewhere to finance other initiatives, he explained. The other shareholders are all long-term committed, Lendzian said.
Regarding the possibility of selling shares to the bank's clients, the majority of whom do not have access to formal banking services, Lendzian was optimistic. "There's nothing concrete right now. We know it's something that Namibia would like to see, so we'll see how we can do it," he said.
The German Development Bank plans to sell its shareholding after five to seven years.