The Namibian Financial Institutions Supervisory Authority (NAMFISA) says it is set to introduce a Consumer Credit Bill.
The Bill aims to ensure regulation and supervision of services provided by credit providers, credit bureaus and debt collectors.
“The purpose of the Bill is to promote fair, transparent and responsible market conduct in the consumer credit market where consumers of credit are protected,” the Authority said.
NAMFISA says the Bill will only apply to agreements made between people or companies that are not closely related.
“The Bill applies to all credit agreements between parties dealing at arm’s length and made or having an effect within Namibia, except where the consumer is a large juristic person whose asset value or annual turnover equals or exceeds the threshold value determined by the Minister of Finance; the consumer is a public body; the credit provider is the Bank of Namibia; or the principal office of the credit provider is located outside Namibia,” the Authority explained.
The regulator said the Bill doesn’t apply in certain situations where the credit is given between people or companies who have a close relationship.
“The Bill does not apply where the credit is extended between parties who are not dealing at arm’s length, for example, shareholder loans; parties in a familial relationship where co-dependency is a factor; parties in an employee-employer relationship where the extension of the credit does not fall within the employer’s ordinary course of business; or parties are not independent of each other and does not necessarily strive to obtain the utmost possible advantage out of the transaction,” NAMFISA explained.
The Authority further explained that the Bill will apply to all types of credit and will enable the minister and regulators to better regulate the sector.
“Small credit providers are not exempt from the Bill and there is no minimum threshold for registration (in terms of a minimum amount of credit extended or minimum number of credit agreements entered into).
The Bill empowers the Minister and the Consumer Credit Regulators to respectively, issue regulations and standards for purposes of the due implementation of the Bill,” said NAMFISA.
The Consumer Credit Regulators are NAMFISA (for credit providers in the non-banking space, as well as credit bureaus and debt collectors); and the Bank of Namibia (for credit providers in the banking space).
