MICROCAPITAL BRIEF: Microloans in Namibia Grew an “Alarming” 34% in 2011 to $183m

According to a report attributed to the Namibia Financial Institutions Supervisory Authority (NAMFISA), a regulatory body under the Namibian Ministry of Finance, microloans disbursed in Namibia grew by 34 percent during 2011, reaching a total amount of NAD 1.5 billion (USD 183 million). This is reportedly due to an increase in lending for consumption. In the last calendar quarter of 2011, microlending represented 3.4 percent of the total credit offered by commercial banks. This is expected to grow to four percent at the end of 2012 and five percent in 2013. “So the rate at which micro-lending is currently growing, is clearly alarming,” Rudolf Kuschke, analyst at Simonis Storm Securities, reportedly said.

NAD 1.44 billion (USD 175 million) out of the NAD 1.5 billion (USD 183 million) disbursed by registered microlenders during the fourth quarter of 2011 were “term” loans, which have a term of six to 60 months and an average annual interest rate of 22 percent. There was a 60-percent increase in the term loans outstanding from December 2010 to December 2011 reaching NAD 286 million (USD 34.8 million). The average loan amount for term loans was of NAD 11,131 (USD 1,355), which represented a 39-percent increase compared with 2010. The total disbursal of “pay-day” loans, which have a one-month term and an average interest rate of 30 percent, decreased from NAD 62.7 million (USD 7.6 million) in 2010, to NAD 61.6 million (USD 7.5 million) in 2011. The average loan amount for pay-day loans fell from NAD 970 (USD 118) to NAD 944 (USD 114). Registered microlenders offered 25,000 term loans and 135,000 pay-day loans during the fourth calendar quarter of 2011.

By Mihaela Grindeanu, Research Associate

About Namibia Financial Institution Supervisory Authority (NAMFISA): Namibia Financial Institution Supervisory Authority (NAMFISA) is a regulatory body under the Namibian Ministry of Finance. It is tasked with regulating and supervising the non-banking financial industry of Namibia. It is a nonprofit, autonomous entity which is funded by levies, registration and penalty fees charged to financial institutions under its purview.

Sources and Additional Resources:

The Namibian.com.na story: “Nam Micro-loans reach ‘alarming’ proportions”, http://www.namibian.com.na/news/marketplace/full-story/archive/2012/june/article/nam-micro-loans-reach-alarming-proportions/

MicroCapital.org story, November 5, 2010: “MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) in Namibia See 24% Increase in Business in 2009 According to Namibia Financial Institutions Supervisory Authority (NAMFISA), Concerns Persist Regarding Irresponsible Lending”, https://www.microcapital.org/?s=NAMFISA&x=0&y=0

MicroCapital.org story, November 1, 2011: “MICROCAPITAL BRIEF: Standard Bank: Majority of Africans Lack Access to Microfinance, Other Financial Services”, https://www.microcapital.org/microcapital-brief-standard-bank-majority-of-africans-lack-access-to-microfinance-other-financial-services/

MicroCapital Universe Profile: Namibia Financial Institution Supervisory Authority (NAMFISA), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=NAMFISA

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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