NAMFISA holds Khomas region public consultation on the Consumer Credit Bill
The Namibia Financial Institutions Supervisory Authority (NAMFISA) hosted a public consultation meeting on Thursday to address and discuss the legislative challenges posed by the Consumer Credit Bill (CCB), a piece of legislation with far-reaching implications for all, from consumers to financial institutions and regulatory bodies.
The Bill intends to create fair and transparent rules within the consumer credit market in Namibia. Furthermore, the Bill will repeal the Usury Act of 1968, the Credit Agreements Act of 1980, and the Microlending Act of 2018.
The event took place at the Goethe Centre in Windhoek. NAMFISA also held public consultation meetings to address the legislative challenges faced by the CCB in all the other regions of Namibia.
This comes as NAMFISA is leading a project in collaboration with representatives from the Ministry of Finance and Public Enterprises, the Bank of Namibia, the Ministry of Industrialisation, Trade and SME Development, the Financial Literacy Initiative, and the Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ).
The project developed and formulated a CCB Policy Paper that addressed the current regulatory framework’s shortcomings and highlighted the “principles to be covered” in the envisaged regulatory framework.
“The Bill’s purpose is, among other things, to promote fair, transparent, and responsible market conduct in the consumer credit market locally, where consumers of credit are protected by ensuring: no arbitrage in the regulation and supervision of different types of consumer credit; responsible borrowing and lending that prohibits credit providers from granting credit without conducting affordability assessments; fair treatment of consumers; transparency; transparency and full disclosure of information; improved reporting of consumer credit information; a consistent system of debt collection and enforcement of obligations under credit agreements; regulation and supervision of services provided by credit providers, credit bureaus and debt collectors, promoting the highest standards of conduct of business; and reduction and deterrence of financial crimes.”
NAMFISA Deputy Chief Executive of Market Conduct and Operations, Johannes Smit, remarked in his welcoming address that it is critical to ensure that the framework they establish is “truly” representative of diverse perspectives and practical for consumers and the financial industry.
“For us at NAMFISA, feedback is the cornerstone of a thriving and responsible financial system. The public’s input enables us to craft regulations that are not only effective but that are also relevant and equitable. Your views, insights, and concerns will help us to create a Consumer Credit Bill that is balanced and responsive to the needs of all stakeholders,” he said at the event.
“Consumer protection is paramount in our deliberations. It underpins the very essence of the Consumer Credit Bill. We must remember that this bill when enacted, will be a powerful tool that can either help individuals realize their dreams or push them into financial hardship. The regulations we put in place must provide a robust safety net, ensuring fairness, transparency, and accountability,” Smit said, adding that the Bill intends to protect consumers’ interests, promote responsible lending, and provide avenues for recourse in dispute cases.
Moreover, he also maintained that consumer credit is crucial for economic growth and stability in this “complex world,” noting that if managed responsibly, it makes it possible for individuals and families to achieve their dreams, such as owning a home, starting a business, or pursuing education.
“However, we must also acknowledge that irresponsible or reckless lending practices can lead to devastating consequences for consumers and the broader economy. Through these consultations, we have the unique opportunity to strike the right balance – one that fosters innovation and competition, while maintaining robust safeguards for consumers,” he concluded.
