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No plans to revive SME Bank – Shiimi

The Namibian government has no plans to restart the Small and Medium Enterprises Bank, said finance minister Iipumbu Shiimi at Keetmanshoop on Thursday.

Shiimi made the remark during a meeting with the business community to find out how the national budget of 2024/2025, this years’ mid-term review can help businesses in the //Kharas region.

The SME Bank was established through a Cabinet resolution to convert the government’s former credit guarantee scheme into an SME bank in 2012.

SMEs were seen at the time as the backbone of local economies in providing services and creating jobs, albeit their challenges of accessing funding, lack of management skills and low utilisation of technology.

“The SME Bank was not profitable and was focusing on a very small section of the population, and it was mismanaged. So why we think it is not going to be viable is because we have learned if you only focussing on a small section of the population or businesses you will not be able to survive.

“We have now created a different window under the Development Bank of Namibia, which is not only servicing SMEs but also other bigger projects. In that way we believe you will have a business that is going to be sustainable,” said Shiimi.

Shiimis’ remarks followed questions by entrepreneurs who wanted to know when they would be refunded for their losses.

Otto Apollus, who owns a construction business, said he was a client of the SME Bank and had money in the bank when the bank closed.

Apollus said many SME owners were encouraged when the bank was established as a tool for uplifting the people of Namibia, through securing economic growth, and prosperity opened, but it only served as a loss to them.

“Currently, I still have my SME Bank card as I had money in that bank. I am still waiting everyday to hear when will we be refunded or will the bank be restarted,” said Apollus.

SME Bank was placed under curatorship in 2017 and met its demise after the Bank of Namibia, at that time headed by Shiimi as bank governor, found that almost N$200 million had been pushed into questionable investments in South Africa.

Out of about N$199,7 million allegedly invested in South Africa by the bank, N$32,7 million was with Mamepe Investments and N$167 million had been paid into accounts of other beneficiaries.

The High Court granted the Bank of Namibia the final sequestration order in October 2018, as judge Jan Smuts confirmed the SME Bank’s liabilities exceeded its assets, and would be unable to honour its commitments with the investors as the bank was insolvent. It would be just and equitable to wind-up the SME Bank, Smuts said in the judgement.

The SME Bank was owned by the Namibian government, through the company Namibia Financing Trust, with 65% of the shareholding, while the Metropolitan Bank of Zimbabwe owned 30%.

Zimbabwean company, Worldeagle Properties, held a 5% stake.

Liquidators Bruni and Mclaren, appointed by the Master of the High Court, said on Friday the winding up of the SME Banks’ estate is not yet complete.

“The buildings of the bank have to be sold as well and that has not been done yet, while there are still many other things outstanding,” said Bruni and McClaren.

New Era reported in 2018 that SME Concerned Depositors continued to retrench employees, with 1500 employees estimated to have lost their jobs since the bank closed its doors, while 250 direct employees of the bank also lost their jobs.