Elsie Kambala, Chief Operating Officer and Head of Unit Trusts, Old Mutual Investment Group, Old Mutual Namibia
Elsie Kambala, Chief Operating Officer and Head of Unit Trusts, Old Mutual Investment Group, Old Mutual Namibia

Many Namibians still keep cash 'under the mattress'

Cash still king
Many Namibians may opt to keep cash rather than subject it to fees and interest because they have limited disposable income in the current economic climate.
Elsie Kambala
In a world increasingly driven by digital transactions, the comfort of cash remains a steadfast companion for many Namibians.

About 67% of Namibian adults held a bank account in 2017, according to the World Bank. This indicates that a sizable portion of the population lacks access to banking services.

The percentage of Namibians who save in banks as opposed to those who keep cash at home is a significant trend in the way Namibians handle their savings, according to a report by the Namibia Statistics Agency.



Compared to 47% in 2021, a significant 30% of Namibians choose to keep their savings in cash at home, or, as the saying goes, "under the mattress."



Interestingly, convenience remains the primary reason for unbanked cash savings, with a sizable section of the population still relying on cash savings. These figures mirror a broader trend in financial behaviour, indicating a gradual transition towards formal banking.



This includes avoiding banking fees and having easy access. Typically, people hold small percentages of the overall funds at home. People keep cash on hand for a variety of reasons. Namibians save money by keeping cash on hand, which is regarded as a safer alternative.



Many Namibians may opt to keep cash rather than subject it to fees and interest because they have limited disposable income in the current economic climate. In order to pay for transportation, groceries, airtime and other necessities, many Namibians require cash on a daily basis.



Using cash instead of other options is more convenient when dealing with emergencies, which doesn't require too much cash.



Vital role, risks



According to the Bank of Namibia (BoN), cash continues to play a vital role in the country’s financial system, even as digital payments become more popular. In 2023, over N$5.2 billion was in circulation, highlighting the ongoing importance of cash for everyday transactions. BoN emphasises that cash remains a convenient and accessible option for everyone, whether it’s for handling minor daily expenses, paying for transport, or purchasing food. However, police reports indicate that keeping large amounts of money at home or on business premises is not particularly safe.



While there are no laws against holding cash in this manner, it poses significant security risks. In Namibia, informal traders and low-income workers frequently rely on cash because they do not have bank accounts or because banking services are expensive. Having cash on hand has many benefits, including being accessible in an emergency when electronics or automated teller machines may not be working. Additionally, cash allows for immediate use without requiring electronic transactions.



Cash is still an essential component of daily life for many Namibians, particularly those without access to bank cards or online banking services. This is especially true for the vast majority of cash-based informal traders. For many people in Namibia, switching to electronic channels will take time. According to BoN statistics, cash is still crucial. Commercial banks received N$10 billion in banknotes in 2023. The volume of coins issued increased from N$14 million in 2022 to N$18 million in 2023, reflecting the consistent need for cash.



The phrase 'cash is king' frequently highlights the importance of having liquid assets in the world of finance, especially during challenging economic times.



The phrase suggests that the most valuable assets are cash or assets that can easily convert into cash without significant value loss, providing stability and flexibility in situations where other funding sources may not be available. This expression, which emphasises the importance of cash in preserving financial stability and taking advantage of opportunities during market downturns, gained especially significant popularity following the 1987 stock market crisis. Warren Buffet once said that "cash is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”



*Elsie Kambala is the chief operating officer and head of unit trusts of Old Mutual Investment Group, Old Mutual Namibia.

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Namibian Sun 2024-11-08

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Katima Mulilo: 24° | 36° Rundu: 19° | 33° Eenhana: 21° | 28° Oshakati: 21° | 27° Ruacana: 21° | 32° Tsumeb: 19° | 23° Otjiwarongo: 18° | 28° Omaruru: 19° | 31° Windhoek: 18° | 28° Gobabis: 19° | 30° Henties Bay: 16° | 22° Wind speed: 21km/h, Wind direction: SW, Low tide: 13:56, High tide: 07:46, Low Tide: 02:00, High tide: 20:14 Swakopmund: 15° | 16° Wind speed: 24km/h, Wind direction: SW, Low tide: 13:54, High tide: 07:44, Low Tide: 02:00, High tide: 20:12 Walvis Bay: 15° | 22° Wind speed: 27km/h, Wind direction: SW, Low tide: 13:54, High tide: 07:43, Low Tide: 02:00, High tide: 20:11 Rehoboth: 18° | 30° Mariental: 21° | 33° Keetmanshoop: 20° | 35° Aranos: 20° | 33° Lüderitz: 14° | 23° Ariamsvlei: 21° | 36° Oranjemund: 14° | 20° Luanda: 25° | 26° Gaborone: 18° | 27° Lubumbashi: 17° | 33° Mbabane: 14° | 32° Maseru: 14° | 23° Antananarivo: 15° | 31° Lilongwe: 20° | 29° Maputo: 19° | 34° Windhoek: 18° | 28° Cape Town: 16° | 22° Durban: 18° | 27° Johannesburg: 17° | 26° Dar es Salaam: 25° | 31° Lusaka: 19° | 34° Harare: 17° | 32° Currency: GBP to NAD 22.59 | EUR to NAD 18.82 | CNY to NAD 2.44 | USD to NAD 17.47 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.25 | EGP to NAD 0.35 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.63 | ZWL to NAD 0.04 | BRL to NAD 3.07 | RUB to NAD 0.18 | INR to NAD 0.21 | USD to DZD 133.15 | USD to AOA 909.05 | USD to BWP 13.4 | USD to EGP 49.25 | USD to KES 129.2 | USD to NGN 1680.41 | USD to ZAR 17.47 | USD to ZMW 27.15 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1878.29 Up +1.09% | Casablanca Stock Exchange (CSE) MASI 14487.67 Up +1.33% | Egyptian Exchange (EGX) 30 Index 31267.47 Up +0.72% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 689.18/OZ DOWN -0.0066 | Copper US$ 4.35/lb DOWN -0.0161 | Zinc US$ 3 020.30/T DOWN -1.37% | Brent Crude Oil US$ 74.99/BBP DOWN -0.0123 | Platinum US$ 984.86/OZ DOWN -0.0123 Sport results: Weather: Katima Mulilo: 24° | 36° Rundu: 19° | 33° Eenhana: 21° | 28° Oshakati: 21° | 27° Ruacana: 21° | 32° Tsumeb: 19° | 23° Otjiwarongo: 18° | 28° Omaruru: 19° | 31° Windhoek: 18° | 28° Gobabis: 19° | 30° Henties Bay: 16° | 22° Wind speed: 21km/h, Wind direction: SW, Low tide: 13:56, High tide: 07:46, Low Tide: 02:00, High tide: 20:14 Swakopmund: 15° | 16° Wind speed: 24km/h, Wind direction: SW, Low tide: 13:54, High tide: 07:44, Low Tide: 02:00, High tide: 20:12 Walvis Bay: 15° | 22° Wind speed: 27km/h, Wind direction: SW, Low tide: 13:54, High tide: 07:43, Low Tide: 02:00, High tide: 20:11 Rehoboth: 18° | 30° Mariental: 21° | 33° Keetmanshoop: 20° | 35° Aranos: 20° | 33° Lüderitz: 14° | 23° Ariamsvlei: 21° | 36° Oranjemund: 14° | 20° Luanda: 25° | 26° Gaborone: 18° | 27° Lubumbashi: 17° | 33° Mbabane: 14° | 32° Maseru: 14° | 23° Antananarivo: 15° | 31° Lilongwe: 20° | 29° Maputo: 19° | 34° Windhoek: 18° | 28° Cape Town: 16° | 22° Durban: 18° | 27° Johannesburg: 17° | 26° Dar es Salaam: 25° | 31° Lusaka: 19° | 34° Harare: 17° | 32° Economic Indicators: Currency: GBP to NAD 22.59 | EUR to NAD 18.82 | CNY to NAD 2.44 | USD to NAD 17.47 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.25 | EGP to NAD 0.35 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.63 | ZWL to NAD 0.04 | BRL to NAD 3.07 | RUB to NAD 0.18 | INR to NAD 0.21 | USD to DZD 133.15 | USD to AOA 909.05 | USD to BWP 13.4 | USD to EGP 49.25 | USD to KES 129.2 | USD to NGN 1680.41 | USD to ZAR 17.47 | USD to ZMW 27.15 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1878.29 Up +1.09% | Casablanca Stock Exchange (CSE) MASI 14487.67 Up +1.33% | Egyptian Exchange (EGX) 30 Index 31267.47 Up +0.72% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 689.18/OZ DOWN -0.0066 | Copper US$ 4.35/lb DOWN -0.0161 | Zinc US$ 3 020.30/T DOWN -1.37% | Brent Crude Oil US$ 74.99/BBP DOWN -0.0123 | Platinum US$ 984.86/OZ DOWN -0.0123