Big Brother watching microlenders
Namfisa threatens fines
The prohibition of bank cards and PIN codes retention was imposed to protect microlending customers from being exploited by unscrupulous microlenders.
The Namibia Financial Institution Supervisory Authority (Namfisa) will fine microlenders who retain borrowers' bank cards, PIN codes and official documents, the watchdog has warned.
The Microlending Act of 2018 prohibits the retention of borrowers' bank cards, PIN codes, original identification documents, passports and original driver’s licenses.
Microlenders found guilty of contravening the Act, are liable to pay penalties calculated at 10% of the annual value of loan disbursements in the immediately preceding financial year, Namfisa said in a statement.
“Consumers of financial services are the most vulnerable members of the financial system, and it is the job of the financial regulator to ensure that they are treated fairly and are protected against market abuse,” Namfisa’s chief exective officer, Kenneth Matomola, said.
Integrity
As a financial regulator, Namfisa plays a role in the market of the non-bank financial sectors under its supervision.
Matomola said the prohibition of bank cards and PIN codes retention was imposed to protect microlending customers from being exploited by unscrupulous microlenders.
“The retention of bank cards, PIN codes and original identification documents enables increased market conduct abuse, and this compromises the integrity of the Namibian financial system, which the regulator will protect,” he added.
While the practice of lenders holding bank cards, PIN codes or original identification documents may not automatically suggest misuse beyond loan repayments, consumers are exposed to a real risk of unauthorised use of their bank cards and other retained original documents.
Registration
The Microlending Act further states that any person who conducts the business of a microlender without being registered in terms of this Act commits an offence and is liable on conviction to a fine not exceeding N$500 000 or to imprisonment for a period not exceeding five years, or to both such fine and such imprisonment.
Borrowers are encouraged to contact Namfisa and report microlenders that insist on keeping their bank cards and PIN codes and original identification documents, by calling the watchdog’s toll-free number, 0800 290 500.
The Microlending Act of 2018 prohibits the retention of borrowers' bank cards, PIN codes, original identification documents, passports and original driver’s licenses.
Microlenders found guilty of contravening the Act, are liable to pay penalties calculated at 10% of the annual value of loan disbursements in the immediately preceding financial year, Namfisa said in a statement.
“Consumers of financial services are the most vulnerable members of the financial system, and it is the job of the financial regulator to ensure that they are treated fairly and are protected against market abuse,” Namfisa’s chief exective officer, Kenneth Matomola, said.
Integrity
As a financial regulator, Namfisa plays a role in the market of the non-bank financial sectors under its supervision.
Matomola said the prohibition of bank cards and PIN codes retention was imposed to protect microlending customers from being exploited by unscrupulous microlenders.
“The retention of bank cards, PIN codes and original identification documents enables increased market conduct abuse, and this compromises the integrity of the Namibian financial system, which the regulator will protect,” he added.
While the practice of lenders holding bank cards, PIN codes or original identification documents may not automatically suggest misuse beyond loan repayments, consumers are exposed to a real risk of unauthorised use of their bank cards and other retained original documents.
Registration
The Microlending Act further states that any person who conducts the business of a microlender without being registered in terms of this Act commits an offence and is liable on conviction to a fine not exceeding N$500 000 or to imprisonment for a period not exceeding five years, or to both such fine and such imprisonment.
Borrowers are encouraged to contact Namfisa and report microlenders that insist on keeping their bank cards and PIN codes and original identification documents, by calling the watchdog’s toll-free number, 0800 290 500.
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