….We never invested in SME Bank, but we were approached
Since the establishment of SME Bank, government has pumped about N$470 million into the bank, the Minister of Industrialisation, Trade and SME Development revealed yesterday.
Minister Immanuel Ngatjizeko has appealed to Chief Executive Officer (CEOs) of State Owned Enterprises not to de-invest their deposits from the beleaguered bank saying it will “undermine the bank’s sustainability and existence.”
In a statement released yesterday, Ngatjizeko said “any decision to de-investing deposits from the SME will “nullify” the N$470million that Government has invested in the bank”.
“While Government fully understands the concerns of SOE’s that have deposits with SME Bank at this difficult time, any decision to de-invest deposits from the SME will not yield the collective desired results. But would rather undermine the bank’s sustainability and nullify Government’s actions to support SMEs through the SME Bank,” he said.
Ngatjizeko added that the Bank of Namibia (BoN) decided to assume complete control of the SME Bank on the 1st of March this year based on “investment decisions” made by the bank and not liquidity concern.
“The Bank of Namibia has decided to assume control of the SME Bank on March 1, 2017. The decision was not based on the capital or liquidity concerns of the SME Bank,
“But on concerns of certain investment decisions made by the top management of the bank which the Bank of Namibia was not satisfied were made in the best interest of SME Bank,” Ngatjizeko stated.
Subsequently, Ngatjizeko told the CEOs that that SME Bank was well-capitalized according to information he received from BoN.
“I am encouraged to note that the Bank of Namibia has confirmed that SME Bank is well capitalized, with a capital position in excess of 68%,”
“The bank has a surplus liquidity position of 155% or N$178 million above the statutory minimum. Both these ratios are also far above the Namibian banking industry average,” Ngatjizeko claimed.
As a consequence, the trade and industry minister has reiterated Government’s commitment to SME Bank and assured the public that they were doing all in their power to ensure that the indented mandate of the bank is “fulfilled”.
Moreover, Ngatjizeko pointed out that the continued support of SoEs to SME Bank was crucial for its relevance in meeting Namibia’s development goals.
“The continued support of SOEs to this noble objective remains crucial and are therefore encouraged, that where investment funds are not required immediately for operational purposes, to invest or reinvest to amounts with the SME Bank.
This Partnership between Government and SoEs will ensure that the SME Bank will remain a relevant institution and be able to meet its important development objective,” further stated Ngatjizeko.
Furthermore Ngatjizeko highlighted that the existence of SME Bank was important to Government objectives with particular reference to Vision 2030, the Financial Sector Strategy and the much talked-about Harambee Prosperity Plan (HPP) as promoted by President Hage Geingob.
Additionally, the SME Bank is aimed at financing micro, small and medium enterprises in the Namibian domestic economy, said Ngatjizeko.
“It (SME Bank) is of crucial importance that these enterprises must continue to receive the necessary support, including access to finance to fulfil their rightful roles in employment creation, wealth distribution and economic growth in general,” the minister stressed.
Moreover, Ngatjizeko also emphasized on the huge amounts of money that Government has pumped into SME Bank saying it was a clear indication of “commitment”.
Similarly Ngatjizeko further noted that SME Bank has extended loans to the value of N$850 million in which SOEs played a crucial role in terms of funding and advancing these loans.
The Patriot reported last week that the state oil company, Namcor, also invested money with SME Bank.
However, the company’s spokesperson Utaara Hoveka this week disputed the report saying “NAMCOR has not invested any funds whatsoever with the SME Bank.”
He added: “Though NAMCOR did receive a request/proposal to invest with the SME Bank, no investments were done. We deemed it fit to undertake due diligence before arriving at any decision on whether to invest or not.”