paul hartmann : status and future of retirement funds in namibia address by mr paul hartmann, deputy governor of the bank of namibia, at the old mutual namibia “ retire right ” conference, windhoek, 23 february 2005. * * * the greatest problem about old age is the fear that it may go on too long. a. j. p. taylor chairperson, ladies and gentlemen, it is a pleasure to be with you this morning and to address this distinguished gathering. i would like to thank the organisers for this invitation and for putting together this conference. the theme of my remarks today is on the “ status and future of retirement funds in namibia ”. introduction as a starting point, it is necessary to recognise the principal role played by the financial system in any country is to provide the infrastructure to allow surplus resources to be allocated to those individuals and companies with deficits. the positive impact of a well - functioning financial system on economic growth of a country is well documented. in most countries, the financial system extends beyond traditional banking institutions to include insurance companies, mutual funds, unit trusts and other financial service providers. these non - bank financial institutions provide services that are not necessarily suited to banks, but they also serve as competition to banks. having a multi - faceted financial system, which includes non - bank financial institutions, can protect economies from financial shocks. however, in countries that lack a coherent policy framework and effective regulations, non - bank financial institutions can exacerbate the fragility of the financial system. there has been tremendous growth worldwide in the mobilisation of financial resources outside traditional banking systems. channelled mainly through capital markets, such rapid financial diversification is posing new challenges equally for investment managers as for regulators in many emerging and developing markets. the pension fund industry, in particular, has grown rapidly during the past decade, which is ascribed to a combination of demographic, political and economic influences. we also take note of the widespread turbulence which is affecting almost all social security schemes throughout the world. in retrospect, the 1980s and 1990s may appear as one of the great watersheds in the development of social policy. a large number of countries are at present contemplating, planning or implementing major changes to their existing schemes of retirement protection. the issues surrounding retirement funds which you are discussing today are so multi - faceted and affect so many people and households that it makes sense to host a conference of this nature. importance of the retirement fund industry let me start by looking

and from the existing central bank branches. this move is also expected to support the provision of “ clean ” notes and coins to kenyans across the country. in conjunction with kba, cbk identified nyeri, meru and nakuru as the appropriate towns to pilot currency centres. the nyeri currency centre is already operational and progress towards establishing the nakuru currency centre are at advanced stages. we expect the nakuru currency centre to commence operations by end of july 2010. this centre will be housed by kcb. besides benefitting nakuru residents by getting clean notes and coins, it is expected that the costs saved by banks from the lower transportation costs will translate to better, cost effective and efficient services to the customers. i must emphasize that the centres are a joint partnership between the central bank and commercial banks via kba. the centres should therefore not be confused with the central bank ’ s operated branches. in the case of currency centers, commercial banks provide the physical infrastructure while cbk provides the necessary human and technical support necessary. in the long run, the cbk will leave currency distribution to be handled by commercial banks. finally, let me touch on three issues that featured in the budget and i think they are critical to our discussions today : the revamping of investment in infrastructure – complement private investment – public investment to reduce cost of doing business – residue binging constraints empowering the youth to secure a future sme support through a revolving fund operated by bank on a 1 to 5 basis : that is, at the minimum this revolving fund will operate on “ for each 1 shilling the government brings, banks will contribute 5 shillings ” ladies and gentlemen : as i wind down my remarks, i urge all businesses in nakuru to take advantage of the current trend of falling interest rates to fully exploit the potential of your businesses. the capacity of kenyan banks to extend credit to all types of businesses has been increased following the increase in the statutory minimum core capital from ksh. 250 million to ksh. 1 billion. the increase took effect from 1st january 2009 and will progressively be increased to ksh. 1 billion by 31st december 2012. the increase was informed by the increasing demand for funding from the banks beyond what they could accommodate based on their capital levels. i also take this opportunity to urge all of you to exercise your rights while engaging with the banks. you must demand to be charged a fair interest rate commensurate to your businesses risk profile investment proposals. this is the only way