Intellectual Property Assets Valuation and Access to Finance: A Case Study of Namibia Small to Medium Enterprises

Abstract

The main objective of this study was to undertake an in-depth analysis aimed at finding out the types of impediments that small and medium business enterprises (SMEs) in Namibia face when trying to access finance at local commercial banks. The study also looked at the most possible ways that could be used to evaluate intellectual property assets so that they could be used by SMEs as collaterals when accessing finances at local commercial banks. The final analytical approach that the study undertook was to establish whether there is any legal framework that could be relied upon by both the local commercial banks and the SMEs when dealing with the issue of borrowing and lending. Gathering of relevant data was done by means of questionnaires and unstructured interviews to collect primary data and also by reviewing relevant published literature to collect secondary data. The data was collected from a total population sample of sixty respondents and it was analysed accordingly using observation forms which guided the researcher to arrive at the desired findings. The population samples comprised of respondents from local commercial banks including the Namibian SME bank, SMEs, relevant public institutions that deal with IP matters and randomly selected members of the public in and around the Capital City Windhoek. The research found that while 30% of the SMEs in Namibia could access credit facilities with relative ease, about 70% are faced with predicaments of having to provide collaterals as securities against the required loans. This is in spite of the abundance of IP assets that the same 70% of SMEs hold as their unrecognised business portfolios. The study also found that there is no legal framework in Namibia that banks and SMEs alike could rely on when dealing with issues related to IP assets valuation to facilitate the application of borrowing and lending. The study therefore recommended that government should formulate a national IP policy that can guide and direct all activities related to IP in the financial sector. The study recommended further that all key stakeholders in commerce should play significant roles in informing and educating SMEs on the importance of developing, managing and protecting their IP assets. Finally, the study proposed that further researches on the subject matter should be encouraged in future in order to continue where this researcher has left off.