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!Gawaxab addresses students on financial inclusion in rural communities

!Gawaxab addresses students on financial inclusion in rural communities

Financial inclusion and its benefits for rural and informal communities came under the spotlight when the Governor of the Bank of Namibia, Mr Johannes !Gawaxab delivered a public lecture at the Eenhana campus of the Namibia University of Science and Technology earlier this month.

Under the theme “Unlocking Opportunities for Rural and Informal Sector Development through Financial Inclusion,” !Gawaxab emphasized the importance of providing individuals and businesses access to formal financial services such as savings accounts, credit, and insurance. He highlighted numerous studies that demonstrate the positive impact of financial inclusion on food security, health and educational, underscoring its potential to transform lives and build a more prosperous future for all Namibians.

The Governor drew lessons from the Bank’s 2023 Annual Symposium where the focus was on the transformation of Namibia’s rural economy to empower local communities.

Explaining the impact of financial inclusion, !Gawaxab pointed out how access to credit and savings accounts help individuals and MSM enterprises to invest in productive activities, in the process generating income and creating jobs.

He also noted the role of insurance products in mitigating financial risks and preventing people from falling back into poverty as a result of unexpected shocks.

On the macroeconomic level, the Governor noted that financial inclusion contributes to economic growth, reduces income inequality, enhances investments in infrastructure and makes growth more inclusive and equitable.

Despite Namibia’s significant progress in achieving financial inclusion, now estimated at 78%, ! Gawaxab said these efforts have not translated into widespread benefits, particularly in rural areas.

“A substantial portion (59.3%) of the rural population remains excluded. Many Namibians (62%), especially those living in rural regions, still rely primarily on cash for income and payments. This reliance often requires travelling long distances to the nearest financial institutions or ATMs, which can be costly and further discourage the use of formal banking services. Additionally, carrying large amounts of cash poses significant security risks, including theft and robbery. High fees and charges associated with day-to-day interactions with the formal financial system also deter customers from engaging formal financial institutions.”

The Governor also used the opportunity to introduce the central bank’s Instant Payment Project to the students. “This innovative initiative enhances financial inclusion by enabling efficient, instant, and inclusive transactions accessible on any device, including non-smartphones,” he said adding that the project will launch in 2025.


 

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