INTERVIEWS WITH GOVERNMENT MINISTRIES
Ministry of Youth and Sport
RESPONDENT: MR ELRICH PRETORIUS ACTING DIRECTOR
This ministry presently has no credit scheme in place to support its skills training programme based at Mariental. The ministry currently places its students on job waiting lists and thus far has had a 70% success rate in securing employment for graduates. The ministry provides financial support to the National Youth Council, which in turn provides grants to entrepreneurs who wish to start new businesses.
National Youth Council (NYC) (funded by the Ministry of Youth and Sport)
RESPONDENT: MR JUSTUS BASSON DEPUTY SECRETARY GENERAL
The NYC is funded by the Ministry of Youth and Sport to provide business start-up grants. The council does not provide training but would refer applicants to training institutions as required. The maximum amount granted as business start-up funds is N$10 000. Between N$80 000 and N$100 000 has been granted annually since 1994. The NYC has a monitoring system in place and reports on its activities to the Ministry of Youth and Sport twice per year.
Ministry of Regional and Local Government and Housing
RESPONDENT: MS MUSHIMBA DEPUTY DIRECTOR
This ministry does not presently have any credit delivery system in place. Its Directorate for Community Development mobilises community groups to start income-generating projects and organises training for group members through NGOs such as the IMLT. The ministry also assists in drawing up business plans on behalf of community groups, which it forwards to donor agencies for funding.
Ministry of Labour
RESPONDENT: MR MUPAINE DIRECTOR
This ministry does not presently have a credit delivery scheme in place. Its Job Creation Fund no longer exists, and funds which were previously available were transferred to the Ministry of Higher Education, Vocational Training, Science and Technology to fund vocational skills training.
INTERVIEWS WITH DEVELOPMENTAL AGENCIES
INTERVIEWS WITH DEVELOPMENTAL AGENCIES
Centre for Research Information Action for Development in Africa Southern Africa Development and Consulting (CRIAA SA-DC)
CRIAA SA-DC is a non-profit professional consultants association established in 1996 and made up of members from Southern Africa and Europe. CRIAA SA-DC in Namibia undertakes applied research and consultancies in programme and project appraisal, monitoring, evaluation and management, in several sectors.
The main services provided so far by CRIAA SA-DC to SMEs and SME support organisations are as follows:
CRIAA SA-DC manages the Katutura Artisans Project (KAP) for the Ministry of Trade and Industry. KAP is a service centre that focuses on promoting small-scale artisans mainly from the informal sector with the aim of boosting employment and income generation. KAP has also embarked on researching and developing appropriate technologies for small-scale enterprises. KAP does not provide credit to SMEs directly, but facilitates their access to credit and business management training, mainly by referring entrepreneurs to the appropriate credit providers and assisting them with loan application procedures.
Namibia Co-operative Credit Union League (NACCUL)
NACCUL was established in 1991 and is the national association for savings and credit co-operatives in Namibia. Since its establishment NACCUL has supported a number of credit groups as well as study groups in six of the countrys thirteen regions, with mixed results (the organisation has suffered a number of setbacks in its operations.)
NACCULs long-term development objective, which the organisation expects to achieve through its newly-implemented Namibia Savings and Credit Co-operatives Revitalisation Programme, is to build an effective and sustainable credit union movement in Namibia. In doing so, an alternative financial system will be created that is capable of facilitating the economic empowerment of the countrys marginal and disadvantaged majority, and particularly women, who constitute more than two thirds of the leagues membership. This will be done by providing support services that address the needs of the member savings and credit co-operatives. The programmes three-year development strategy is designed to facilitate the integration of savings and credit co-operatives as effective, efficient and sustainable instruments for the social and economic empowerment of members, communities and the countrys population at large. Through this programme NACCUL will provide training and extension services to the committees managing the member co-operatives and study groups. NACCUL will also conduct information-sharing and mobilisation seminars and meetings to motivate the programme members and potential members, as well as to raise public awareness of savings and credit co-operatives.
Namibia Rural Development Project (NRDP)
The NRDP is a non-profit registered welfare organisation that aims to empower the rural and other disadvantaged groups to realise their potential and gain control of their lives, and to set them on the path of sustainable human development within the Namibian context.
The project has suspended its previous credit scheme and is now in the process of developing a new policy which will take into consideration, among other things, the following:
This new policy will be formulated in line with the governments policy on SME development and will be as sensitive as possible to the situation in rural areas.
A BRIEF REVIEW OF THE HISTORY AND CLOSURE OF THE PRIVATE SECTOR FOUNDATION
A BRIEF REVIEW OF THE HISTORY AND CLOSURE OF THE PRIVATE SECTOR FOUNDATION
The Private Sector Foundation (PSF) was closed down on 31 May 1998, having operated in terms of its mission to serve Namibias disadvantaged communities since its inception on 1 December 1980. During its 17½ years of operation, the PSF initiated programmes in low-cost housing, labour relations, training, small-enterprise development and productivity promotion. In due time a number of other organisations also entered these fields, with more extensive resources. This enabled the PSF to concentrate its efforts on the development and support of micro enterprises as being an area from which Namibias people and economy would draw particularly noticeable benefits.
The activities of the PSF in the field of small enterprise development and support were initiated following a wide-ranging needs assessment that was conducted over a period of six months. Thereafter, a training programme in small- and micro-enterprise management was designed in collaboration with a focus group of small-scale entrepreneurs drawn from Rehoboth, Katutura, Khomasdal and Oshakati. Shortly after the introduction of the training programme, participants who had completed their courses approached the PSF to request assistance in gaining access to resources in order to set up enterprises and so to test the new knowledge they had acquired. The main concern was for access to finance, as the people concerned had been unable to convince the traditional finance institutions to make funds available.
In response to this request the PSF introduced the Mini-Loan Scheme, in terms of which clients could borrow up to N$2 500 for use in consolidating, expanding or starting a business. The interest rate was subsidised at 1% per month (which was about 60% of the prime bank rate at the time) and it was a condition that the loan be repaid over a period of 12 months in equal monthly installments.
About a year after the Mini-Loan Scheme was introduced, a number of women in Katutura approached the PSF to request a reduction of the loan amount and to change the conditions to make them more manageable for the sort of enterprises they were operating. It was then that the Get-up! Scheme was introduced, in terms of which people who belonged to a group could borrow an initial amount of N$25 to use for their enterprise. The N$25, together with the 10 cents charged as interest, had to be repaid after one week but could be borrowed again, also for one week, provided that the capital and interest were again repaid at the end of that week. If the first loan had been repaid according to the agreed conditions, then the loan amount could be increased to N$50, and for subsequent loans the amount could be increased in steps of N$25 until the maximum loan amount of N$500 was reached.
Funds for both the Mini-Loan Scheme and the Get-up Scheme were obtained from local donors and the operating costs were covered by contributions from the private sector.
Around the time of Namibias independence in 1990, the local donors adopted the view that under the new political dispensation resources would be made available to continue these operations. As a result the government and foreign donors were approached for assistance and in 1993 and 1994 the first foreign funding was secured to supplement the funds made available from government sources.
The PSF credit scheme was revised to make provision for loans as follows:
The conditions of the loans were as follows:
Loans were paid out by way of a cheque made out to the borrowers, after all the preliminary requirements had been met. By the time the PSF stopped its operations, about 5 500 people had attended the training courses and about 3 200 people had obtained loans from the foundation.
An approximate total of N$1 600 000 had been paid out in loans, of which about N$900 000 was outstanding. The average value of the loans awarded amounted to about N$500, although the range covered amounts from N$300 to N$4 000. Over 80% of the clients were women in both urban and rural areas of the country. The PSF operations were run from a head office in Windhoek and four branch offices in Ongwediva, Katutura, Mariental and Keetmanshoop.
Based on information gathered over a period of four years, the PSFs operational costs were comprised of two major components: the training cost per entrepreneur trained and the cost of maintaining the loan administration system per loan in operation.
These costs, as at May 1998, amounted to N$420 per person trained and N$350 per annum, per loan in operation.
It was not possible to recover the full training costs from the trainees who were required to pay a standard fee of N$20 for the training. In fact, not all participants paid the training fee. The cost of follow-up courses, usually presented in one-day sessions, amounted to about N$100, but for these courses too, a fee of N$20 was levied.
In theory the cost of maintaining the loan monitoring system was to be recovered from the interest charged on the loans. As the interest rate was pegged at 2% below prime for the initial loans, the actual recovery of the loan-monitoring cost could not amount to more than N$90 per annum. For larger loans the recovery of loan-monitoring costs was more lucrative as the interest amount collected on the loan was greater. For loans of N$2 000, for instance, the amount of interest collected was N$360, whereas the cost of maintaining the monitoring system would be N$350 per annum, as for the smaller loans.
In respect of both the training and the loan monitoring costs, the cost of salaries and allowances made up about 65% of the total. The rest was incurred as a result of travelling costs (about 12%), communication costs (about 7%), office rentals and other overhead costs.
The lessons learned over the past 17½ years may be summed up as follows:
JOINT CONSULTATIVE COMMITTEE (JCC) MEMBERSHIP AND CONTACT LISTS
© Friedrich Ebert Stiftung | technical support | net edition fes-library | Mai 1999