SME BANK DECENTRALISES NORTHWARDS

By Penda Jonas Hashoongo
January - February 2016
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As an institution tasked with being the preferred financial services provider for the Micro and Small to Medium Enterprises (MSMEs), SME Bank, has worked hard to decentralize its operations and ensure that the people in the remote regions of the country can also access these services. This hard work culminated in the opening of branches in the northern towns of Ongwediva and Rundu during the latter part of 2015. In this edition, Prime Focus Magazine conducted an interview with Martha Ngandu and Fritz Horaeb, the Managers of the two respective branches, to assess the impact these institutions, had on these communities.
 

Fritz Horaeb
SME Bank Rundu Branch Manager

Prime Focus: How has the Bank been received by the clientèle in Rundu?

Horaeb: The reception is positive as people get to understand that SME Bank is a Commercial Bank which provides banking services to depositors, investors and borrowers.

Prime Focus: Do you think the Bank’s operations are now clearly understood, particularly by people in the northern part of the country?

Horaeb: It is not yet as fully understood as we would want.  We are working on more marketing and customer education.

Prime Focus: What is the clientèle of the Bank in your branch since inception?

Horaeb: Since the opening of the Bank on 9 November 2015, we have opened approximately 590 accounts to date and clients are still streaming to the Bank for new accounts on a daily basis.

Prime Focus: How do you see the Bank’s prospects in the region in the next five years?

Horaeb: Our aim is to increase banking services as we continue to grow, meeting the banking needs of SMEs, rural communities, micro-entrepreneurs and previously disadvantaged individuals. Our customers are from all sectors of the economy, major ones being Construction, Property development, Transport, Hospitality, Tourism, Manufacturing and Renewable energy.

Prime Focus: What are the immediate plans for the Bank in this region?

Horaeb: Our immediate plan in the Kavango Region is to branch out to Nkurenkuru and Divundu, following a high demand for our services.   

Prime Focus: How often does the Bank engage in information sharing sessions and outreaches to make sure the clientèle in the region is aware of its existence?


Horaeb: The Bank is new in the Kavango region but is already involved with stakeholder engagement sessions such as NCCI meetings, SME hubs, women gatherings, etc.

Prime Focus: Are there any market penetration challenges thus far?

Horaeb: Some of the challenges that we have observed during the first couple of weeks is the literacy problem but it helps to have recruited staff from this region and our information leaflets printed in indigenous languages.

Prime Focus:  What initiatives will be used in the Kavango region to promote the commercial aspect of the Bank which is often overshadowed by the loan-granting facet of the institution?

Horaeb: Through various Marketing campaigns, we continue to sensitise the public that the Bank has a full Commercial Banking License and  offers banking products and services to individuals and companies that are not necessarily MSME’s, through Personal Banking (Retail), Corporate Banking, Treasury and Investment Management.

Prime Focus: With reference to staff development and training, what programs has the branch used to ensure that its employees are adequately trained to carry out the Bank’s operations in an efficient manner?

Horaeb: The newly recruited Rundu Branch staff went through thorough orientation and on the job training at our Windhoek Head Office.  In addition, we have experts at the branch assisting with the opening of the Bank to fully master the Bank’s operations.

Martha Ngandu
SME Bank Ongwediva Branch Manager

Prime Focus: How has the Bank been received by the clientèle in Ongwediva?

Ngandu: The Bank was received very well by the Ongwediva community and the north central community at large.

Prime Focus: Do you think the Bank’s operations are now clearly understood, particularly by people in the northern parts of the country?

Ngandu:  Not yet. We need to continue focusing on Marketing and client education.

Prime Focus: What are the general requirements for an MSME to access funding in the form of loans?

Ngandu: An applicant requires:

  • To complete an SME Bank Loan Application Form.
  • Business documents, such as proof of business registration, certificates of good standing, etc.
  • Namibian ID/ Valid passport of shareholders, directors or sole owner.
  • A Business Plan.
  • Annual Financial Statements for existing business.
  • Tender Award Letter (for tender funding).


Prime Focus: What is the clientèle of the Bank in your branch since inception?

Ngandu: The Ongwediva branch officially opened for business to the public on 7th September 2015 and already has approximately 1000 clientèle.

Prime Focus: How do you see the Bank’s prospects in the region in the next five years?

Ngandu: Our aim is to be the preferred Bank in the region as we continue to grow.    

Prime Focus: Could you please give a brief explanation of the collateral requirements of the Bank.

Ngandu: One thing that we need to appreciate is that our lending is not based on security but on the viability of the business. Security serves as mitigation for unforeseen circumstances that may impact the business.  We also educate the borrowers on how to manage their businesses and monitor them to ensure that they are delivering on what they would have promised when they borrowed from the Bank.  Most importantly are the strategic partnerships and/or networks through which MSMEs are provided with mentorship using experienced business persons.

Prime Focus: What are the immediate plans for the Bank in Ongwediva?

Ngandu: Our immediate plans are to sensitise the public on the Bank’s products and services, as well as highlight that we are a fully fledged Commercial Bank.

Prime Focus: Most MSMEs do not understand how the SME Bank operates, could you please explain the loan accessing process for the benefit of the marginalised MSMEs?

Ngandu: SME Bank operates as a normal Commercial Bank, offering products and services that meet the needs of individuals as well as businesses (MSMEs and Corporates).


Clients come in with a need for a loan, our customer service team assists the clients to determine how much they are legible for and what their repayment tenure will be based on their Business Plan and cash flow projections. In the event that the customer does not meet the requirements, the Bank guides the clients on how to compile all the neccessary documents for assessment.

Prime Focus: Most MSMEs are stuck in the get rich quick mentality, what is your advice to them to improve operations?

Ngandu: My advice is to start small and to gradually grow their businesses step by step.  It’s very important to have an Accounting system, get advice from your personal banker and/or get a credible mentor.

Prime Focus: Are there any market penetration challenges thus far?

Ngandu: Yes, reaching out to our clients in remote villages is a challenge we are working on.

Prime Focus: In view of the fact that Agriculture is a big proponent of the business activities in this region, what initiatives will or has the bank embarked on to enable farmers to benefit from the funding provided by the institution in the form of loans?

Ngandu: SME Bank collaborates with the Environmental Investment Fund (EIF) at a subsidised rate, to help with the financing of renewable energy related initiatives.


SME Bank also signed an MOU with Agribank to offer financial assistance to MSMEs in Agribusiness.

Prime Focus: What initiatives will be used to promote the commercial aspect of the Bank which is often overshadowed by the loan-granting facet of the institution in the Oshana region?

Ngandu: The Bank has Marketing campaigns such as road shows and expos to promote the Bank’s two service offering facets which consists of the loan offering and traditional banking products and services.

Prime Focus: With reference to staff development and training, what programs has the branch used to ensure that its employees are adequately trained to carry out the Bank’s operations in an efficient manner?

Ngandu: Staff members are the most valuable assets for any company or business and the Bank made sure that all staff went through an induction program to understand its operations and systems. This ties in with the Bank’s Vision, Mission and Values. Most importantly, the employees are trained on customer service, duties and the different product offerings.
In addition, we have experts at the branch assisting with the opening of the Bank to fully master its operations.