An online survey has found that most government employees want to see the Payroll Deduction Management System (PDMS) improved rather than shut down. About three-quarters of those who took part said the system helped them avoid falling into too much debt by making loan repayments easier to manage.
The survey was conducted by Fin Fit Investments with help from Avril Payment Solutions. It looked at how government workers feel about the PDMS, which helps them pay back loans directly from their salaries. Workers said the system is helpful for managing debt and making sure payments are made on time.
However, many agree the system needs to be modernised, with clearer rules and better communication.
Co-founder of Fin Fit Investments, Francois Brand said the decision to cease payroll deductions on the government Payroll Deduction Management System was rushed and no proper consultation was done.
“This is very worrisome, and debit orders will be expensive,” he said.
This comes after the Ministry of Finance announced in August that all discretionary payroll deductions through the PDMS will stop on 30 November. The PDMS is currently managed by Avril Payment Solutions.
When the system ends, lenders will need to do proper checks to make sure borrowers can afford the loans and will have to take on more risk themselves.
For thousands of civil servants, this change could potentially cause financial stress. Without payroll deductions, many may struggle to manage monthly payments or get loans.
Presenting the findings of the survey Brand said, they approached the survey on the Payment Deduction methodologically, using Facebook for broad advertising. Out of 1 532 responses, they received 657 valid, clean, and complete responses without duplicates.
“These findings indicate that the system is widely regarded as a practical and reliable repayment mechanism that promotes financial discipline,” he said.
He added that, a minority of respondents described negative experiences such as difficulties in stopping deductions, continued deductions after cancellation or delayed refunds signalling a need for stronger process efficiency and communication.
The survey recommends that, many employees fear that abrupt changes could lead to missed payments, policy lapses or confusion about new responsibilities. Prioritisation is important of employee education and debit order fee relief during the shift to debit orders, addressing the 71.2% of concerned respondents citing added costs.
“Survey responses indicate that most employees regard the PDMS as a reliable and well-organized system that helps prevent over-indebtedness. Instead of a complete removal, the system could be reformed while modernising into a digital platform that maintains its protective functions while improving efficiency and transparency. These protective functions should be significantly strengthened in favour of consumer protection and improvement of financial capability with preferential products aligned to reduced risk exposure,” Brand said.
Furthermore, minimum take-home threshold can be raised (endorsed by 63.1% of improvement-favouring respondents) or stricter credit assessments can be enforced, responding to the 32.6% who cited unaffordable loan approvals as a failure point. Integrating this with the Bank of Namibia and Namibia Financial Institutions Supervisory Authority oversight to cap interest rates (43% support) and limit top-ups should reduce over-indebtedness in a context where cash-loan debt totals N$7.6 billion.
“Ministries, unions and employers can collaborate with financial-wellness providers to offer financial education and financial behaviour change interventions, individual coaching and digital personal financial management tools. Regular awareness campaigns timed around end-of-month salary payments can reinforce good habits and prevent debt stress,” he said.
Meanwhile, economist John Steytler praised Namibia’s PDMS for its critical role in promoting financial inclusion across the country, emphasising that the system remains widely trusted and valued by the public.
Speaking on the findings of a recent national survey, Steytler said the PDMS has become a vital tool in helping Namibians access financial services that were previously out of reach for many.
“My takeaway from the survey is that people feel that the PDMS must be improved. Most of the respondents trust the system, and the majority say they do not want to do away with the system,” said Steytler.