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Financial inclusion not limited to banking

Established in 1997 in accordance with the Banking Institutions Act, the Bankers’ Association of Namibia is the representative trade association for the commercial banking sector in the country. FNB Namibia Chief Executive Officer and Chairperson of the Association, Ian Leyenaar, spoke without his FNB Namibia cap about the developements, opportunities and challenges the sector has had to contend with. The successful implementation of the Financial Services Charter adopted in November 2008 was of prominence during the discussion. Leyenaar said that “The financial services charter gives certain hurdles that we have to try and perform in certain ways and means, one, for instance, being local ownership of banks. Bank Windhoek is certainly the home-grown local bank, FNB is the next one, which we also listed, and we have a significant local shareholding of just under 42%, and obviously those that haven’t got any local shareholding will need to consider how they achieve that.” “BEE remains a challenge where we come from, with past imbalances prevailing, and that requires introducing skills transfer, skills development, coaching, mentoring, to be able to bring previously disadvantaged people into the banking sector and in into senior and executive positions,” said Leyenaar. “Namibia has done particularly well on financial inclusion.

In the time banks have gotten more innovative, most of us having introduced quite interesting products such as cellphone banking, the e-wallet type products, making banking more accessible,” added Leyenaar. “I believe that financial inclusion is allowing people access to the system in whatever form, and cellphones have been an innovation of absolute note because most people have a cellphone, even low-income earners, and if you have access to a cellphone you can have access to banking. I think that gave a big boost to the innovative products of the banking sector, with the cellphone industry allowing people access, and this has helped with regard to financial inclusion. There has been a lot of development. Financial inclusion is not only what banks offer, but the insurance industry as well.” “There’s been a lot of hype around bank charges, and it has prevented financial inclusion and getting those who don’t make use of banks into the system. There have been a number of developments such as the introduction of the basic banking account across the board.” Drawing attention to the costs aspects, Leyenaar said, “We have costs. Cash handling and related costs are very expensive. You’ve got security controls. It’s very labour intensive, you need a lot of bricks and mortar, unlike electronic banking, and when you analyse all of that and add up the costs, then what you try to do is recover the costs from the products. That’s where cash deposit fees have evolved from. It’s trying to recover those costs. The discussions will continue and we’ll look at ways in which we can try and contain costs.” Leyenaar added that collectively, the commercial banks steered well clear of collusion and had made it an effort to seek guidance from the Bank of Namibia with regard to policy decisions the different banks had to take individually and collectively.

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