*First posted on 23 June 2006*
SUBMISSION ON BANKING REGULATIONS VIS-À-VIS CREDIT PROVISION
The following is the submission made to the Parliamentary Standing Committee on Economics, Natural Resources and Public Administration. They held public hearings on bank charges and regulations on 14 July 2006 in Windhoek.
The banking system in Namibia is presently facing difficulties in their abilities to provide financing for individuals and business, especially small and medium enterprises (SME's). This problem is further influenced by the present level of non-performing debt being experienced in all sectors that provide credit. This poor performance on loans has led to many institutions having to recoup their losses, and provide themselves with profit, through high interests and "innovative" banking charges.
It is my opinion that this can be addressed through the increased usage of Information and Communication Technologies. As an example, I attach a paper on the need for credit bureau, and the establishment of an economic database to address this need. (if you wish a copy of the paper, please email me at email@example.com)
Through the sharing of information between public and private sectors (with the appropriate legislation to prevent abuse), a reliable source of information can be provided which will necessitate the banking institutions to become more competitive to attract clientele. This clientele in turn will be able to negotiate for better rates, and lower charges, if they are aware of their own credit worthiness.
I remain at the convenience of the Committee to provide any further information they might require to encourage the necessary changes in legislation, as well as provide authority to the necessary public institutions, to implement a system to encourage the responsible growth of the credit sector.
Lastly, I must add that I believe such a credit agency, whether public or private, will only facilitate the provision of credit, and not provide moral influence on us as a society to ensure we keep our side of the bargain and keep up our financial obligations.
Thought for the week:
"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principles of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale" - Thomas Jefferson (American 3rd President)