WINDHOEK
The Financial Intelligence Act, which was passed in Namibia with the focus on anti-money-laundering and combating the financing of terrorism (AML/CFT), aims at ensuring public safety, minimizing the scope for criminal activity and closing down the financial channels used by terrorists.
However, during the Quarterly Economic Review presentation held yesterday, the Namibia Economic Policy Research Unit (NEPRU) said that while the objectives are worthy for maintaining integrity in the financial system, they involve strict requirements for those wishing to open bank accounts, including proof of physical address, for instance, in the form of a utilities’ bill.
These requirements, according to NEPRU researcher, Jonathan Andongo, can impede access to financial services for the poor, especially those living in communal areas, rural areas or informal settlements, because many poor people do not have a physical address in the conventional sense, let alone access to the type of water, electricity or telephone services that come with a monthly bill.
“Insisting on new customers meeting international proof-of-physical address standards may impede efforts to promote access to financial services; therefore, such regulations need to be implemented flexibly.
For instance, holders of small deposits and low-balance accounts could be allowed to comply with simpler customer identification requirements so as not to impose onerous requirements that would exclude them from access to financial services given the small AML/CFT risks associated with small balances and low-value transactions,” said Andongo.