The Namibia Financial Institutions Supervisory Authority (NAMFISA) is calling on the public to provide input to the Consumer Credit Policy, which would ultimately guide the development of the country’s Consumer Credit Bill.
Consumer protection and improved financial literacy are one of the key focus areas of financial inclusion under the Namibia Financial Sector Strategy framework. However, according to Namfisa, there are legislative limitations on the regulatory and supervisory framework governing agreements on consumer credit in Namibia’s financial sector as the current legislation lacks robust provisions on effective consumer protection against unfair market practices.
This is because the only credit extended under the scope of market conduct supervision, although not broad-based in consumer protection principles, is that which is extended by the banks and microlenders.
“Credit extended by retailers, for example, is not supervised against unfair market conduct, although such loans are also financial products. As a result, there is a fragmentation in the regulation and oversight of credit, with limited impact on indebtedness of households and desired market conduct in general,” read a statement by Namfisa spokesperson Victoria Muranda. Muranda added that there is a need to identify the ideal way of reforming a fragmented market conduct oversight function on credit, which currently falls under the mandate of different legislation and institutions. In this regard, Namfisa is leading a project with representatives from the Ministry of Finance, Bank of Namibia, Ministry of Industrialisation and Trade, Financial Literacy Initiative (FLI) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to address the legislative challenges in the form of the Consumer Credit Policy.
The primary objective of the Consumer Credit Policy is to identify existing legislative gaps in the relevant prevailing laws and how the gaps should be addressed; optimal institutional set-up suiting Namibia based on experiences from other countries, and clear principles that will guide the drafting of the legislation on consumer credit.
Said Muranda: “In view of these identified limitations in the current legal framework, it was deemed necessary to revamp the legislation that governs the provision of credit in Namibia hence the need for further input from the public on the content of the Consumer Credit Policy paper”.
Muranda encouraged the public to submit comments via Namfisa’s Comments Template on or before 31 July 2020. The policy document and the comment template is available to the public on NAMFISA’s website.
2020-06-17 09:43:47 | 3 months ago