Look after the cents, the dollar will look after itself

By By Dorcas Mhungu
October 2010
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THE banking and insurance sectors in Namibia are well developed and can compete with First World countries except that the country bleeds with severe shortages of expertise which has hampered innovative solutions, Herbert Maier, owner of Greenhouse Financial Advisors says.

According to Maier, the challenge for corporate clients is to find and conclude more effective and efficient financial solutions. The country needs, as part of the solution to the prevailing critical shortage, an increased drive to set up private equity and venture capital funding vehicles such as the initiative recently taken by the Government Institutions Pensions Fund (GIPF).

“The process that GIPF is going through currently is a prudent and considered process and the only one going forward that will create acceptable funding solutions and in turn, positive returns for the GIPF,” Maier says.

He adds that Namibia needs to retain skilled workforce in the country and secure them in the financial services sector by importing skills of shortage and in that way transferring skills to Namibians thereby ensuring the building of the required capacity within Namibia.

“We need the practical expertise out here in the market place,” remarks Maier, recently appointed Director at Standard Bank Namibia.

By not having vehicles or mechanisms that can effectively finance or facilitate the financing of new and upcoming businesses, he says, it is difficult to know how many entrepreneurs the country really has.

Emphasizing on the “look after the cents, the dollars will look after themselves” concept, the financial expert says there is a critical need to nurture the Small and Medium Enterprises (SMEs) by providing venture capital funding.

“The biggest problem is finding the right people for the job at management level.”

He argues that venture capital funding in a developing environment forms the backbone of any successful economy. This would make it possible to employ people and run a business efficiently so that in the end, it will contribute to the growth of the economy.

“You don’t have to come from university to be innovative,” says Maier, adding that there are many people who are sitting with brilliant project ideas, yet have no funding to unlock these ideas in the form of feasible businesses.

Maier says that although government has been instrumental in establishing the Development Bank of Namibia, being a bank by nature, it requires collateral, something the typical entrepreneur seldom has.

Therefore oans cannot be secured to consummate start up ventures and according to him, “This is exactly where the venture capital and equity funds come into play.”

Venture capital and private equity funding, Maier remarks, will bridge the gap between not having any project funding and being able to raise bank funding, as these do not need require collateral to the extent that traditional bank funding would.

With at least 12 years expertise in the financial sector, Maier is of the opinion that negative control mechanisms would mitigate risk for the investor in a venture capital model. The negative control mechanisms give the venture capital investor predetermined rights of control that ensure the business at hand follows the set-up strategy, he says.

Born and bred in Namibia, Herbert Maier trained as a Chartered Accountant with Deloitte & Touche in Windhoek and after completing his training and working for his sponsors, he joined the Ohlthaver and List Group of Companies as Group Financial Manager.

He was instrumental in the listing of Namibia Breweries on the Namibian Stock Exchange (NSX) before he moved on to Fleming Martin Securities. He was one of the co-founders of Pointbreak where he was specifically involved in Corporate and Structured Finance. His job included raising and placing of debt and equity finance for the corporate market.

In August 2009, Maier who also sits on the boards of Camelthorn Brewing Company and Namibia Asset Management,went solo when he started Greenhouse Financial Advisors, a management consulting and corporate advisory firm. PF