The Namibia Financial Institution Supervisory Institutions (NAMFISA) is cautioning the public against the practice of microlenders retaining possession of bank cards and PIN codes, original identification documents, original passports, and original driver’s license of borrowers.
NAMFISA’s Corporate Communications & Consumer Education Manager, Victoria Muranda said the retention of bank cards and PIN codes, original identification documents, original passports, and original driver’s licenses has been prohibited since 1 March 2012.
“Microlenders found guilty of contravening section of the Microlending Act, which is to keep or make use of bank cards or personal information such as bank cards; PIN codes, original identification documents, original passports, or original driver’s license as security or for collection arrangement purposes, is liable to pay penalties calculated at 10% of the annual value of loan disbursements in the immediately preceding financial year,” she said.
Muranda said the regulations aim to protect microlending customers from being exploited by unscrupulous microlenders.
“Consumers of financial services are the most vulnerable members of the financial system, and it is the job of the financial regulator to ensure that they are treated fairly and are protected against market abuse through the enforcement of the Microlending Act. Consumers, on the other hand, face a genuine risk of their cards being used for other reasons, and the regulator cannot wait until a loss occurs before taking preventative actions,” she said.
- The Microlending Act, 2018 Act provides for a 5 percent default interest charge for up to three months, after which the borrower can be handed over to debt collectors or lawyers.
- Before being handed over, the borrower should be informed of the lender’s intention, 28 days before the handover.
“Although each lender has its own method of dealing with defaulters, the provisions of the Microlending Act must be followed. Muranda further advises that lenders cannot require borrowers to sign documents without an agreement between the two on the terms of the loan,” she said.
NAMFISA exists to supervise financial institutions and financial services, and to advise the Minister of Finance on matters relating to financial institutions and financial services in terms of the NAMFISA Act, 2001 (No. 3 of 2001). It is further responsible for supervising and enforcing compliance with the Financial Intelligence Act, 2012 with respect of all accountable and reporting institutions supervised by NAMFISA in terms of the NAMFISA Act.
