One Economy launches collateral free loan for grassroot enterprises

28 Feb 2018 18:40pm
WINDHOEK, 28 FEB (NAMPA) – The One Economy Foundation on Wednesday launched its One Nation Fund, aimed at providing collateral free lending for the second economy.
The fund, according to a media statement issued by the One Economy Foundation on Wednesday, seeks to assist grassroots entrepreneurs and small business owners to access capital to advance their business interests.
The fund is divided into two segments; the One Seed which lends up to N.dollars 50 000 and focuses on helping grassroots entrepreneurs like kapana, vetkoek and firewood vendors increase their earning without imprisoning them in an expensive debt trap of hidden costs and high interest rates.
The second is called One Growth, which lends up to N.dollars 250 000 and envisages rural, township and informal settlement entrepreneurs who maintain basic financial records and wish to expand their businesses.
Entrepreneurs must be able to provide proof that they are unable to access financing from formal institutions, the statement noted.
“Collateral free loans are high risk in nature and we therefore place high reliance on character references. For this purpose, we attribute substantial value to character references from grassroots organisations or self-help groups which are prepared to assist with self-monitoring,” noted the statement.
Speaking at the launch, One Economy Founder, First Lady Monica Geingos, said: “Providing affordable and accessible finance to second economy and township entrepreneurs has the potential to spur the development of township economies and change the socio-economic face of Namibia’s poor. We believe that this collateral free fund will place One Economy one step closer to the forefront of sustainable and effective social entrepreneurship.”
The One Nation Fund has already disbursed N.dollars 1 million in collateral free lending through a pilot programme which has provided loans and mentorship to 18 second economy entrepreneurs.
The businesses range from take aways and restaurants, tailoring, panel beating, chalk manufacturing, and agriculture to brick manufacturing and scrap metals.
The One Nation Fund intends to disburse an additional N.dollars 2 million in order to fund approximately 40 entrepreneurs in the 2018/2019 financial year.
'Applications will be accepted twice a year and a maximum of 20 applicants per cycle will be selected. Applications for the first round can be submitted from 12 – 30 March 2018. The second round for the submission of applications will open from 1 – 14 August 2018,” said the statement.
(NAMPA)
CT/AS/HP