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Finance

What to do before foreclosure and repossession

May 11, 2023
What to do before foreclosure and repossession

Bank Windhoek recognises that unexpected financial challenges may arise in life. Our dedication is to assist and advise our customers in finding the optimal solutions to overcome these difficulties.

The pre-legal process begins in our branches and we exhaust all other options before seeking legal recourse. The Bank aims to assist its customers in recovering financially while also safeguarding the bank's interests and its obligation to contribute to growing the Namibian economy. The following are some of the many options we can offer:

Debt restructuring: This refers to the refinancing process where a company or customer having cash flow issues comes into an arrangement with lenders to renegotiate favourable or flexible terms to save themselves from financial distress. It adjusts the terms of the current contract to make it more manageable. 

Account consolidation: Sometimes, having too many accounts can be overwhelming. As a result, combining these accounts into a single new credit facility for more manageable repayments creates peace of mind. It is less expensive when it comes to fees.

Loan deferments: When a customer or a company has problems repaying their loans, they may request a loan deferment, which allows them to temporarily stop making payments or reduce their monthly payments as a short-term financial relief.

Refinancing: This entails updating the contract terms based on a new valuation and repayment plan. It refers to the process of revising and replacing the terms of an existing credit agreement, usually as it relates to a loan or mortgage.

Power of Attorney: This legal document gives a person or trustee organisation the legal authority to act for them to manage their assets and make financial and legal decisions on their behalf. In this case, the Bank assist the customer in selling their assets privately to ensure unlocking the most value from the assets. Jointly, the Bank and the customer seek buyers for the assets privately.

Voluntary surrender of vehicles: In some instances, the customer can turn over their vehicle for private auctions with car dealerships and other customers who have the financial capacity to purchase the vehicle when the previous owners cannot meet the monthly repayments.

The SME Economic Recovery Loan Scheme: This initiative is a partnership between the Namibian Government and several local banking institutions, including Bank Windhoek and the Bank of Namibia. It was created to inject additional funds into solvent small and medium-sized enterprises (SMEs) to increase business productivity and stimulate economic growth and job creation.

The above options are subjected to a formal credit application consideration, depending on each merit of the client. We encourage our branch employees to listen to our customers and ask them the right questions to identify the best solutions for their situations.

We aim to be approachable, understanding, and ready to help. It is critical to analyse the root cause of the problem and establish a goal, action plan, task to get to the action plan, and timelines to assist the customer in addressing the root cause of the problem to cure it.

If foreclosure and repossession become the only option after exhausting all alternatives, we handle the process carefully and transparently.

We all have an essential role in building solid and lasting relationships with our customers and maintaining Bank Windhoek's reputation as a reliable financial partner.

By prioritising alternative solutions before resorting to foreclosure, we show our unwavering commitment to our customers' economic well-being and stay true to our core values. Since early communication is critical, we encourage customers to constantly communicate with the Bank when they are experiencing or anticipating financial difficulties.

Eddie King is Bank Windhoek’s Credit Executive Officer

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