Exclusion fuelled by cost and inaccessibility
The FNB Group has its objective of moving from the leading to the preferred financial services provider in Namibia over the past financial year, according to Ian Leyenaar, CEO of FNB Namibia.
“This strategic plan assisted FNB’s path through the global economic turmoil and ensured that we were not distracted by the many uncontrollable factors we had to contend with, enabling the group to achieve commendable financial results.”
On the issue of financial exclusion, Leyenaar said that exclusion was reduced from 51% in 2007, to 31% in 2011 according to the latest FinScope figures.
“We are extremely aware of the fact that our government promotes financial inclusion and wishes to close the 45% unbanked public gap – something we wholeheartedly support,” he said.
Leyenaar added that he believes there were basically two reasons for the non-use of banking products in Namibia.
He explained: “The first reason is the demand side which is determined by the availability of financial resources and affordability. With an unemployment rate of 51% it stands to reason that many people do not have a need for formal banking services. The second cause is the accessibility to, and cost of banking services. Namibia is a huge country with a small population, which makes traditional banking through a network of branches very expensive. That is why FNB Namibia embarked on a programme to offer Namibians more appropriate electronic products. We realise that there is still scope to widen and deepen both the quality and the extent of inclusion by means of such products and services.”
FNB Namibia has worked closely with the Bank of Namibia and concentrated on giving wider access to banking services by developing and implementing special low cost, safe and easy to use products for both individuals and small businesses. Two unique transactional accounts, aimed specifically at the non-banked citizens, were launched in 2011. These new accounts have a pay-as-you-use pricing formula, which means there are no monthly account fees and clients can still maintain their bank accounts even if they do not earn a regular income.
Furthermore in support of the central bank’s drive towards greater financial inclusion, FNB Namibia enhanced their Cellphone Banking value proposition, to make registration more convenient for the lower end of the market, the bank said in a statement.
“FNB Namibia is the only bank that offers this in-Contact notification service through both local cell phone operators. We offer the free inContact SMS service that keeps customers informed about their transactional banking. We also started sending customers educational messages if they use more expensive banking channels at month end,” said Leyenaar.
According to the bank, it is “in no way reluctant to bank in marginalised societies”, which is evident from its network of 51 branches, 224 ATMs and mini ATMs, and 2 050 speedpoints across the country.
The bank has made a concerted effort to reach those unbanked masses by offering more appropriate and affordable propositions to marginalised Namibians, such as self-service, affordable, easy to use and safe electronic channels, said Leyenaar.
“This we believe is the best way to truly bring financial services to every Namibian. The challenge is that many people do not trust it yet, so FNB has embarked on a number of extensive educational drives to assist in this mind shift and get people to change their perception and consequently their behaviour.
“That is why FNB Namibia has committed to the Financial Sector Charter Strategy and is an active participant of Financial Literacy Initiative under the auspices of the Ministry of Finance. We also support many other consumer education forum initiatives driven through the private sector,” he said.