AfDB Signs First Private Sector Loan in Namibia to Improve Access to Finance and Open Doors to Education
Mr. Ebrima Faal, Regional Director at the Southern Africa Resource Center (SARC) of the African Development Bank (AfDB), signed on behalf of the AfDB the agreements for a loan of ZAR 65 million from the AfDB to Trustco Finance (part of the Namibia based “Trustco” group) to support its student lending program in Namibia. The signing ceremony took place in Windhoek, Namibia’s capital. Also taking part in the ceremony were DEG and Proparco who signed the agreements for loans to Trustco Finance of ZAR 50 million each.
The loan to Trustco Finance is in fact the AfDB’s first Private Sector Operation (PSO) in Namibia and aligns very well with the country’s development priorities. It also aligns with the AfDB’s own country assistance strategy for Namibia.
The AfDB’s loan is expected to enable Trustco Finance to provide more than 10,000 new micro-loans to Namibian students to further their education at Trustco’s distance-learning education institution, the Institute for Open Learning (IOL). Furthermore, the loan is expected to benefit those living in the rural areas of Namibia as well as women. The very positive gender empowering effects of the loan from the AfDB are seen as key outcomes in an environment that has historically been characterized by a dysfunctional education system.
Moreover, since a significant portion of the loan borrowers are expected to be teachers seeking to improve their qualifications, this loan will help to improve the overall quality of Namibia’s education system. This is critical since according to a 2005 World Bank report on Namibia (entitled: “Namibia Human Capital and Knowledge Development for Economic Growth with Equity”), 60 per cent of primary school teachers and 30 per cent of secondary school teachers are unqualified. Among the qualified, a large proportion lacks essential competencies such as mastery of their teaching subjects. These weaknesses limit the teachers’ effectiveness in implementing the official curriculum and lead to exceptionally low completion rates in secondary education. Continuous teacher training, particularly through distance learning, could therefore compensate for these inadequacies although financing for courses is too big a hurdle for many. In fact, the lack of access to finance is in effect denying many Namibians access to education. Nevertheless, through Trustco, access to education is enhanced through the provision of both education for students and the finance to support lifelong learning.
During the signing ceremony in Windhoek, Mr. Ebrima Faal said: “In Namibia, the unemployment rate among the youth is currently 40 per cent. The AfDB’s support to Trustco Finance will greatly improve access to additional teachers’ training courses and adoption of new skills. It will therefore enhance the employment prospects of school learners by increasing the proportion of those who complete as well as receive good education.”