By Charles Tjatindi
WINDHOEK
In a world that has made many breakthroughs in the field of technology, many people are still unaware of the advantages of proper savings and cash management. To date, many people are still reluctant to do business with financial institutions, especially commercial banks, as they are unaware of the benefits that they could derive from such transactions.
These are the views of the Deputy Permanent Secretary in the Ministry of Finance, Erica Shafudah, when she addressed guests at the opening of a branch of Nedbank in the capital on Wednesday.
Shafudah’s statement was delivered on her behalf by the Deputy Director – Cash and Debt Management in the Ministry, Anna Mbundu-Shetunyenga.
Shafudah noted that a lot of people are still reluctant to use banking facilities, due to uncertainty on the operations of banks and other financial institutions.
“Villagers, and even people working for established institutions in Windhoek, often exchange their pay cheques at local shops, which of course leads to the temptation to spend it immediately,” said Shafudah.
She urged commercial banks such as Nedbank to decentralise their services by opening more branches in areas like Katutura and peri-urban communities where the poor mostly live. She said it is mostly in these areas where the majority of the “unbanked” population lives.
“… for the poor, using a bank account has several advantages instead of keeping cash under the sofa … you are not tempted to go on a spending spree as if you were sitting on the money, and savings at a bank earn interest that can be converted to additional spending later on.
Shafudah also noted that most of the “unbanked” sector shies away from doing business with commercial banks due to the high charges often imposed by Namibian banks, which are among the highest in the world.
According to her, banks usually argue that the small size of the market does not allow economies of scale, therefore resulting in charges being pushed up to cover for the deficit. She also requested banks to explain how bank charges are derived.
“Many indeed do not know the amount of money their bank charges them … for example, would you be willing to buy a car if you couldn’t tell upfront the total price? I didn’t think so,” she noted.
Nedbank has over the past few months opened new branches and agencies, in an effort to reach out to its consumer base. Branches were opened at Eenhana, Katima Mulilo, and Grootfontein. ATM facilities were also installed at Okongo in northern Namibia.