Electronic money or e-money is now viewed as the most convenient and efficient method of conducting financial transactions. 

With e-money, individuals can make payments and transfers electronically, eliminating the need for physical cash.

Bankers Association of Namibia (BAN) CEO Brian Katjaerua said this week that by December 2023, N$67 billion had been transferred through e-moneychannels like e-Wallet, easyWallet and Blue Wallet, as well as other financial services.

E-money systems are operational through mobile phones, computers or other electronic devices, enabling people to participate in the digital economy.

He added that the banking sector is trying hard to ensure it accommodates everyone along with innovation by providing access to financial services for individuals who may not have access to traditional banking systems.

The Namibian recently reported that over N$40 billion was transferred through e-money platforms in 2020, up from N$14.8 billion the previous year, representing a 177% increase in value, outpacing the value growth driven by bank cards and electronic transfers. 

In 2015, e-money platforms were still in their infant stages in Namibia, processing barely N$1.4 billion in transactions. 

By 2017, these platforms had permitted a record N$10 billion worth of transactions. 

The new behaviour was partly influenced by Covid-19, which encouraged people to use technology differently. 

He noted the banking industry currently has about 1.693 million customers. 

Out of this number, the sector has over 181 200 customers who access banking services for free. 

“These are account holders of an account known as the basic bank account. This account is to accommodate the most vulnerable of society. Requirements are those with earnings up to N$2 000, and the minimum opening balance is at N$20,” said the BAN CEO.

Some of the benefits of a basic bank account include free services such as cash deposit fees (up to N$1 million), account management fees, internet banking, electronic deposits, first card issue fees and withdrawals, which are free for the first three times. 

Furthermore, the sector advanced loans to the value of N$108 billion in 2023. 

Also, they paid taxes amounting to N$7.5 billion from 2020 to 2023.

The banking sector declared dividends of N$1.1 billion for 2023.

The Namibia Financial Stability report from the Bank of Namibia and the Namibia Financial Institutions Supervisory Authority released in April 2024 showed that the banking sector reported healthy profitability levels on the back of net interest income. 

“The improved profitability position was on account of an increase in net interest income. Moreover, should interest rates remain elevated, the banks are expected to maintain healthy profitability levels throughout 2024. 

The share of non-interest income for the banking sector was reported as contributing 42.3% to total income. Although interest income remained the dominant source of income for banks, non-interest income is generally considered to be a more stable source of income due to lower procyclicality,” reads the report. 

-mndjavera@nepc.com.na