SPEECH DELIVERED AT THE LETSHEGO BANK LAUNCH GALA EVENT
Mr. Ipumbu Shiimi
Governor
25 July 2017
The Chairperson of Letshego Bank Namibia, Mr Shepherd, and fellow Directors,
The Chief Executive Officer, Madam Ester Kali,
Management, Staff and Stakeholders of Letshego Bank Namibia,
Captains of Industry,
Invited guests,
Ladies and gentlemen,
1. I am delighted and deeply honoured to join you at the Letshego Banking Launch
"Letshego: Celebrating growth,
Gala under the theme diversification and
improving
life".
2. This celebration comes at a time when, as a country, despite the challenges we
face, Namibia continues to benefit from a stable, resilient and inclusive financial
system as reported in the latest Financial Stability Report issued in April 2017.
during the Governor's Annual Address,
3. On 28 October 2010, I talked about the four-
point agenda which became a rallying point for enhancing Financial Inclusion. The
four-point agenda I talked about then was not merely a list of things that the Bank of
Namibia would do to enhance Financial Inclusion, but a blueprint which we, together,
as Regulators and Financial Institutions should implement to broaden the financial
system. These four agenda points served as corner stone of the Financial Sector
Strategy launched by the Minister of Finance on 2012, which has an expiry date of
2021.
4. At the time we pledged reform in the following 4 areas; Regulatory Framework and
Consumer Protection, Consumer Literacy, Access to Financial Services and Local
Ownership of Commercial Banks. Since it is almost 5 years since the launch of the
Financial Sector Strategy and nearly 7 years since the day of my speech, it is
befitting that we pause and take stock of the progress made in realizing this pledge.
First, Regulatory Framework and Consumer Protection
5. The cornerstone of our Regulatory Framework has always been centered on smart
regulations that allows the financial sector to innovate and flourish, while ensuring
consumer protection and ultimately the stability of our financial system. We have
always advocated for fairness, in favour of both the financial service providers and
consumers of such services. In order to ensure fair treatment of consumers by
banking institutions, in 2013, the Guidelines for Lodging Complaints and a Code of
Good Banking Practices, which guide consumers on how to lodge complaints
against commercial banks and commercial banks on how to deal with such
complaints, respectively, haves been developed jointly by the Bank of Namibia and
Banker's Association of
the Namibia. In 2014, the Credit Bureau Regulations were
issued to regulate the operations of credit bureaus in Namibia. Prior to 2014, there
was no regulatory framework to regulate and protect consumers against unfair
treatment by credit bureaus. The Regulations provide for a dispute resolution
mechanism in the event of disputes arising between consumers, credit bureaus and
credit providers.
6. More importantly, the Financial Services Adjudicator Bill which will handle
complaints against financial institutions has been developed and tabled in the
National Assembly. The Adjudicator will cater for consumer concerns related to both
banks and non-bank financial institutions under one roof.
7. Bank of Namibia and NAMIFISA are also currently working on the Consumer Credit
Bill which will regulate all consumer credit related issues and consolidate outdated
laws regulating credit such as the Credit Agreements Act of 1980 and the Usury Act
of 1968.
The second issue is Financial Literacy and Capability.
8. The importance of Financial Literacy cannot be overemphasized. There is a saying
that knowledge is power. It is thus important that we empower our consumers of
financial services with the knowledge in order for them to make informed financial
decisions. The financial literacy of the average Namibian above the age of 16 was
calculated as 42.75% in 2013. Indicating that we have some kilometers to travel to
make the majority of Namibian more financially literate.
9. On this front, the collective efforts of the partners of the Financial Literacy Initiative
under the Ministry of Finance have done a lot of work to educate consumers and this
work should be intensified to close the gap. The FLI is currently planning a follow-up
survey this year which will show us how much progress we have made since the last
survey in 2013.
Access to Financial Services and Products
10. Access to quality financial services and products has been identified as a catalyst for
economic growth and poverty alleviation, both in developing and advanced
countries. The potential of the financial sector to contribute meaningfully to economic
growth and social progression of any economy depends on the full participation of
individuals and firms in that sector. It is for this reason that a number of initiatives
have been introduced in our financial sector to ensure access to financial services
and products.
11. The ultimate aim of such interventions are to enhance access to banking and
financial services for the previously excluded members of our society. High fees and
charges contributes to the exclusion of the majority of the society from participating
in the formal financial system. For this reason, two targeted interventions were
introduced to deal with the issue of high fees and charges in order to allow access
for more individuals and business:

The Introduction of the Basic Bank Account (BBA) with minimal charges aimed to
benefit low income earners of the society was one pragmatic intervention. All
commercial banks have introduced this type of an account, meeting the set
standards. The number of active basic bank accounts has increased from 59 022
in 2012 to 385 224 by December 2016.

The other intervention was the Standards on Cash Deposit Fees which removed
all cash deposit fees charged by banking institutions to all accounts of individuals
and accounts belonging to businesses with a turnover of N$1 million or less
which become effective from 31 March 2015.
12. Coupled with the above interventions, the Bank of Namibia has joined hands with
other institutions such as the Development Bank of Namibia to work on the SME
Financing Strategy for Namibia. The Strategy comprises of three complimentary
facilities namely: Credit Guarantee Scheme, Venture Capital Fund, and Coaching
and Mentoring Programme. This Strategy is at an advanced stage and once
implemented it is expected to significantly improve access to finance for Small and
Medium Enterprises in Namibia.
Local Ownership of Commercial Banks
13. Lastly, in line with the aspirations of the Namibia Financial Sector Strategy and the
Financial Sector Charter which advocates for some degree of localization of the
financial sector, the Bank has proposed changes to the ownership structure of new
banking institutions in the draft amendment Banking Institutions Bill which is under
the consideration of the Minister of Finance. The amendments will mean that new
entrants will be subjected to minimum participation of local ownership.
14. Existing banking institutions have also agreed to increase local shareholding. Other
encouraging avenues of fostering local ownership include the listing on the local
stock market and selling of existing shares to employees. Our expectations are that
within the next two years the remaining banks should follow-suit to by either listing
on the Namibia Stock Exchange or through private placements.
Ladies and gentlemen,
15. I am delighted to note that Letshego Namibia has shown a strong commitment to
become a strong player in the financial sector in Namibia. Equally, it is pleasing to
learn that Letshego Namibia is considering to list of the NSX, a move which will open
doors for the ownership of the group to many Namibians and at the same time
improving the Namibian capital markets. This is indeed a commendable step. Going
forward, I want to strongly urge Letshego Namibia to continue to ensure fairness to
its customers as this too will contribute to further development of Namibia.
I'm encouraged by Letshego's
Furthermore, decision to transition from consumption
credit to a more productive credit as the later will help contribute to the production
capacity of our economy and contribute to the stability of your bank and ultimately
sustainable economic development in Namibia.
16. Ladies and Gentleman
adage
17. On 28 October 2010, I ended my speech with the Chinese "A Journey of
with the first step" I believe we have taken the first step
thousand miles begins
toward financial inclusion. We have travelled about 500 miles of that journey, we still
have some more miles to get there, but getting there we shall. Getting there,
however, requires that all of us should continue to work hard as a team to create a
sustainable and an inclusive financial sector for our children and their children's
future. I believe, Letshego is one of the trailblazers on this journey, we look forward
to continue travelling with you.
I thank you for your kind attention
Iipumbu Shiimi.