WINDHOEK – The rights of borrowers who make use of cash loan services are now protected under the Micro-Lending Act 2018 (Act No. 7 of 2018) which came into effect in October last year.
The law is to a great extent focused on promoting and protecting the rights of borrowers, Victoria Muranda, the Manager for Corporate Communications at the Namibia Financial Institutions Supervisory Authority (Namfisa) said in response to questions from New Era.
“It does this by among others seeking to limit malpractices that have been prevalent within the micro-lending industry and their effects on borrowers,” said Muranda.
The Act thus prohibits practices that are detrimental to borrowers, Muranda elaborated.
These include the retention of the bank cards and PINs of borrowers, signing of blank or incomplete documents, inclusive of acknowledgments of debt, consents to judgment, waivers of borrowers’ legal rights and agreements to consent to the attachment of borrowers’ property without a court order.
“The Act imposes specific obligations on micro-lenders to ensure that they practise responsible lending. At the same time, it also seeks to promote responsible borrowing. In addition, the Act seeks to foster financial inclusion, which is one of the key focus areas of the Namibia Financial Sector Strategy,” explained Muranda.
Muranda also explained that Namfisa is mandated to exercise supervision over the business of non-banking financial institutions, which includes micro-lenders (cash loans) and the services of such institutions.
“Namfisa is also mandated to advise the Minister of Finance on matters related to the aforementioned institutions and their services,” Muranda added.
She explained Namfisa’s involvement with the Act. “Namfisa’s initial involvement with the Act, while it was in its drafting phase, was that of advisor to the Minister. Now that the Act is law, Namfisa’s role is to ensure the implementation and enforcement of the provisions of the Act. Also, Namfisa must regulate and supervise micro-lenders in accordance with the provisions of the Act,” explained the Namfisa spokesperson.
She added that the institution must ensure that micro-lenders are duly registered in terms of the provisions of the Act. The institution also has the responsibility to ensure that registered micro-lenders comply with their conditions of registration.
“Namfisa must oversee the business of micro-lending in Namibia and make sure that there is fairness, efficiency, transparency and orderliness in the micro-lending industry,” said Muranda.
Additionally, Namfisa “must set down the rules” for micro-lenders to conduct business. “We must ensure that the playing field is levelled and that all micro-lenders are adhering thereto,” emphasised Muranda.
2019-01-16 09:15:44 3 months ago