It has been reported that the – so far unreleased – Namibia Financial Institutions Supervisory Authority’s (NAMFISA’s) 2010 annual report indicates that Namibians borrowed 24 percent more than in 2008 and approximately 120 percent more than five years ago.
A total of 146,000 Namibians borrowed from microlenders in 2009, borrowing on average NAD 1,634 (approximately USD 240), 31 percent more than did the average borrower the previous year. The 329 registered microlenders disbursed 518,000 loans last year.
NAMFISA stated in the report that it is concerned about the industry as inspections show a significant amount of “reckless lending”, where clients are allowed to borrow more than half their take-home salary or qualify for subsequent loans without having paid off a previous loan. The report also found the continued practice of rolling over loans, a practice – illegal in Namibia – which allows the borrower the option to renew a loan on the date when it is due without actually paying the loan.
By Witt Gatchell, Research Associate
About Namibia Financial Institutions 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 that is funded by levies, registration and penalty fees charged to financial institutions under its purview.
Sources and Additional Resources:
[1] The Namibian: “Micro-lending business booming in Namibia”, by Jo-Mare. http://www.namibian.com.na/news/marketplace/full-story/archive/2010/nove…
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