Registered micro lenders have pushed back against claims that they are driving Namibia’s debt crisis, arguing that the sector accounts for only a small fraction of total household debt and placing the blame squarely on commercial banks.
According to the Micro Lenders Association (MLA), registered cash loan providers account for just N$7.5 billion of the nearly N$130 billion owed by Namibians, while commercial banks are responsible for the overwhelming majority of household debt.
Presenting before the Parliamentary Standing Committee on Economy and Industry, Public Administration and Planning, MLA representative Charles Visser rejected assertions that micro lenders are the main contributors to the country’s growing debt burden.
According to figures presented by the association, Namibians currently owe approximately N$130 billion, of which around N$118 billion is owed to commercial banks, while registered cash loan providers account for about N$7.5 billion.
“Statistics that I have been able to obtain, and which we have also included in our submission, indicate that Namibians currently owe close to N$130 billion. Of this amount, approximately N$118 billion is owed to banks, while N$7.5 billion is owed to registered cash loan providers,” Visser said.
The MLA said microfinance loans account for only 6% of national debt and argued that broader socio-economic challenges, including unemployment, inequality, weak economic growth, rising living costs, medical expenses and education costs, are the primary drivers of increased borrowing.
The association also challenged perceptions surrounding payroll deduction codes, which have come under increasing scrutiny from policymakers.
According to Visser, fewer than 10 of Namibia’s 958 registered micro lenders have access to payroll deduction codes, while the vast majority collect repayments through the national payment system using debit orders.
Data presented by the MLA shows that 730,000 microfinance loans were disbursed during 2025, with 88% processed as payday loans through the national payment system and only 12% linked to payroll deduction codes.
“Out of 958 registered micro lenders, fewer than 10 have access to deduction codes. Of the 730,000 loans disbursed in 2025, 88% were payday loans processed through the national payment system, which is a regulated statutory system,” Visser said.
He further argued that payroll deduction codes, which have been in operation for more than two decades, were introduced and administered by government and are utilised by a wide range of institutions, including banks, insurers, medical aid funds and trade unions, not solely micro lenders.
The MLA called for a comprehensive national household debt assessment to establish the full extent and composition of consumer indebtedness in Namibia.
The proposed review would examine all major sources of debt, including bank loans, retail credit, maintenance orders, payroll deductions and informal lending arrangements.
The association also urged government to fast-track the Consumer Credit Bill, which is intended to strengthen oversight and create a unified regulatory framework for the country’s credit industry.
“This should include accelerating the Consumer Credit Bill through proper consultation and implementation, designing any successor payroll deduction system with real-time affordability validation, open access and proper oversight, strengthening enforcement against unregistered and informal lenders operating outside the law, and finalising and implementing a national policy on financial education as a matter of urgency,” Visser said.
The presentation comes amid growing debate over household indebtedness and proposals to reform payroll deduction mechanisms as policymakers seek solutions to rising consumer debt levels and financial vulnerability.
