The Bank of Namibia (BoN) is planning to align the Building Societies Act 2 of 1986 with international best practices.
The move is also expected to attract investors into the sector. Namibia currently does not have an active building society, amid calls for their establishment to address the country’s housing backlog.
The central bank has since embarked on a consultative exercise to gather comments and recommendations on the Act, which provides for the registration and supervision of building societies.
“The need for the revision is occasioned and necessitated by the fact that the business of building societies as well as the regulatory and supervisory functions over building societies have evolved over the years” said BoN.
The central bank said the application of the current regulations was proving challenging as some provisions have become irrelevant over the years.
“It is therefore critical that the legal framework be updated to reflect current realities. As a result, the Bank revised the General Regulations on Building Societies in the short term, while the Act will be reviewed in 2023. Given the timeframe for reviewing the main Act, this arrangement has proven to be the most feasible and efficient approach.”
“The primary purpose of the current revision of the General Regulations on Building Societies is to improve efficiency in the interpretation and implementation of the legislation. The policy matter concerning the General Regulations on Building Societies will be addressed once the relevant provisions in the enabling Act, the Building Societies Act, have been amended.”
The Act defines a building society as a group of people who come together to raise money through the sale of shares, public deposits, or member subscriptions in order to build, buy, and improve homes as well as to provide the necessary security for the mortgage of urban immovable property.
