Namibians, drowned in debt, owe Namibian $ 6.5 billion in cash loans
WINDHOEK – Regardless of your social background, be it an entrepreneur, general manager or domestic worker, Namibians are drowning in debt, with 238,640 borrowers owing $ 6.5 billion. Namibian dollars to microcredit institutions.
These staggering figures are included in the latest annual report of the Financial Institutions Supervisory Authority of Namibia (Namfisa) launched yesterday.
According to the report, the total number of borrowers stood at 238,640, with term borrowers accounting for 90.4% and payday borrowers accounting for 9.6%.
Payday loan is a type of short-term loan with a higher interest rate that is payable on the next payment date, while a term loan spans a period longer than one month and attracts lower interest rates.
The value of the microcredit portfolio increased 18.0% to N $ 6.5 billion, a growth attributed to a higher amount of credit extended to term lenders.
The report states that the total value of loans disbursed in 2018 increased by 12.4% to N $ 4 million from the previous year.
In addition, Namfisa Managing Director Kenneth Matomola in a press release notes that “Non-Bank Financial Institutions (NBFIs) have remained healthy and sound and no systemic vulnerabilities have been identified in the financial system.
According to him, the balance sheets of NBFIs, as evidenced by the data collected by Namfisa, have remained financially sound, well capitalized and solvent.
He said the industry had increased its assets by 0.9 percent to N $ 290.3 billion as of December 31, 2018.
“The industry has maintained its resilience during the period under review, despite difficult economic conditions in the country,” he said.
He said that the moderate growth in assets of financial institutions during the review period was mainly reflected in the asset performance of the pension fund industry due to the weak performance of financial markets.
Regarding pension funds, Matomola said total investment in pension funds, including insurance policies, increased 2.4% year-on-year to N $ 158.5 billion.
In addition, he said that investments held in insurance policies accounted for 12.1% of total industry investments.
“The industry has failed to meet the new domestic asset requirement of 42.5% as of December 31, 2018, as required by regulation,” he said.
He said the non-compliant funds requested an exemption which was approved by Namfisa with conditions.
However, he said the industry as a whole has not violated any overall exposure limits in accordance with regulations.
In addition, Matomola said the insurance industry maintains a healthy financial position, as shown by its balance sheet with surplus assets and a healthy solvency position above the authority’s prudential requirements.
He said total long-term industry assets increased 5.0% to N $ 56.5 billion while total short-term industry assets rose 4.9% to 6 , 5 billion Namibian dollars.
“Moderate asset growth primarily reflects volatile and declining performance in financial markets,” he said.