Mbumba engages banks over excessive charges

President Nangolo Mbumba has met with Namibian bank executives to address concerns over high interest rates, excessive charges and services.

He highlighted the importance of public sentiment, emphasising the persistent complaints about the banking sector at the meeting, which was held on Friday.

The president called on financial institutions to investigate these concerns, acknowledging the validity of some complaints, while also noting that others may be unfounded.“Today’s meeting combines an apt platform for us to exchange ideas and compare notes.

Most importantly, we can listen not only to your concerns and complaints, but you too can also listen to ours – especially to what the Namibian people out there are saying on things such as high interest rates, excessive banking charges and sometimes services, which are not as desired,” he said.

Despite this, he said banks actively foster entrepreneurship, drive innovation and promote technological advancement, making a significant impact on both national and global economies.

He highlighted that it is crucial that the banking sector remains well regulated, a function done very well by the Bank of Namibia.

“As a government, we would like to see the local banks playing a more proactive role in terms of development, particularly when it comes to funding small en medium enterprises (SMEs) through ways and means that can substantially lessen the collateral requirement and involve more equity types of instruments,” he said.

The president said the government would like to see banks become development partners, whose sole motive should not be an exclusive focus on profit, but also on social inclusion and mainstreaming of the unbanked segment of society through innovative banking instruments, such as mobile banking.

“We must continually ensure funding of the SMEs through ways and means that can substantially lessen the collateral requirement and involve more equity types of instruments,” he said. He said banking strategies must continually align with the socio-economic context in which they operate.

“Banks should ensure they continue contributing to the overall well-being of the society in which they operate by treating their workers well and providing them with all required benefits of social security, such as housing, pension, medical aid and competitive salaries, and finally contribute to social corporate responsibility,” he said.

This comes as the Bank of Namibia plans to conduct a comprehensive study on user fees and charges in response to persistent public concerns over high fees and charges in the country’s financial sector.

The planned survey is building upon findings from the Bank of Namibia’s 2023 Consumer Payments Behaviour Study, which highlighted significant consumer dissatisfaction with banking and payment product costs.

The new investigation aims to investigate transparency, disclosure practices and the broader supply and demand dynamics within the sector.

This initiative follows the 2010 study by the Ministry of Finance, which first brought to light the excessive fees associated with Namibian banking products and services.– The Brief