WINDHOEK - It doesn’t matter which walk of life you are from, be it tenderpreneur, chief executive officer or domestic worker, Namibians are drowning in debts, with 238, 640 borrowers owing an astonishing N$6.5 billion to micro-lending institutions.
These staggering figures are included in the latest Namibia Financial Institutions Supervisory Authority (Namfisa) Annual Report launched yesterday.
According to the report, the total number of borrowers stood at 238, 640 with term-loan borrowers accounting for 90.4 percent and payday borrowers accounting for 9.6 percent.
Payday loan is a type of short-term borrowing at a higher interest rate which is payable on the next pay date, while a term-loan extends for a period longer than a month and attracts lower interest rates.
The value of the micro-lending loan book increased by 18.0 percent to N$6.5 billion, a growth attributed to a higher amount of credit extended to term lenders.
The report says the total value of loans disbursed during 2018 had grown by 12.4 percent to N$4 million compared to the previous financial year.
Furthermore, Namfisa’s Chief Executive Officer Kenneth Matomola in a media statement notes that “The Non-bank Financial Institutions (NBFIs) remained sound and healthy and no systemic vulnerabilities were identified in the financial system.
According to him, the NBFIs balance sheets, as reflected in the data collected by Namfisa, remained financially sound, well capitalised and solvent.
He said the industry grew its assets by 0.9 percent to N$290.3 billion as at 31 December 2018.
“The industry maintained its resilience during the period under review, despite challenging economic conditions in the country,” he said.
He said the moderate growth in the financial institutions assets, during the review period was mainly reflected in the performance of the pension fund industry assets owed to weak financial market performances.
On pension funds, Matomola said the total retirement funds investment, including insurance policies increased by 2.4 percent year-on-year to N$158.5 billion.
In addition, he said investments held in insurance policies accounted for 12.1 percent of the industry’s total investments.
“The industry has not met the new domestic asset requirement of 42.5 percent at 31 December 2018 as required by regulation,” he said.
He said non-compliant funds applied for exemption which was approved by Namfisa with conditions.
However, he said the industry, as a whole did not contravene any overarching exposure limits as per regulation.
Furthermore, Matomola said insurance industry maintained a sound financial position as shown by its balance sheet with excess assets and sound solvency position above the authority’s prudential requirements.
He said the long-term industry’s total assets grew by 5.0 percent to N$56.5 billion while the short-term industry’s total assets increased by 4.9 percent to N$6.5 billion.
“The moderate growth in assets mainly reflects the volatile and declining financial market performances,” he said.