The Bank of Namibia (BoN) has thrown its support around proposed measures to reduce foreign ownership in commercial banks, saying decision making at financial institutions should resort with locals.
Finance Minister Iipumbu Shiimi recently tabled planned amendments to the Banking Institutions Act, which once passed, will place a cap on the ownership of foreigners in local banks.
The central bank Governor Johannes !Gawaxab said it was time for decision making to be done in Namibia.
“We want the banking sector system that works for Namibia, we want decision making to be centralised and happening in Namibia,” he said.
!Gawaxab said banking decisions taken to extend credit by banking institutions were not benefiting Namibian households and businesses.
“If you look at the private sector credit extension in the country, it’s around 2%, 3% even last year it was around 3% level, if you look over the past couple of years, private sector credit extension has been pretty high 2009, 2010, 2011, 2012 but we currently have a situation where credit extended to Namibian individual households and to Namibian SMEs and businesses are pretty low,” !Gawaxab said.
!Gawaxab was of the opinion that decision making regarding credit, was being done outside Namibia.
“In as much as we are responsible for the stability and soundness of the banks, we want credit decisions to be taken in Namibia by people that the Bank of Namibia has authorised. That’s why we want to change the law so that we are able to take credit decisions in the country so that governance and control resides in the country, that’s what we want to change,” he said.
Namibia’s banking sector is currently dominated by South African banks which hold significant shareholding in local operations, despite some being listed on the Namibia Stock Exchange, with the exception of Bank Windhoek, which was founded locally and still maintains a large Namibian shareholding.
