Introduction
The consistently increasing living cost has
brought a big burden to Namibian as they never seem to earn enough to cover
their daily needs. Many people tend to deal with this problem through the
moneylenders such as banks and cash loans who charge them very high interest
rates. By so doing their indebtedness is increased even more and the situation
becomes more serious to them.
However, this money problem can be reduced
if they join together under the cooperative principles of self-help and mutual
help.
A cooperative is a business owned by its
members for their mutual social economic and cultural benefit. There are two
types of cooperatives namely,
1.
consumer or service cooperative – owned and managed by the people
who use its services; and
2.
workers’ cooperative – owned
and managed by people who work in the business.
Namibia created an enabling environment for
cooperatives through the Co-operatives Act 1996. In this Act, it defines
various types of service cooperatives. These include Marketing & Supply
cooperatives, Consumer cooperatives, Housing cooperatives and Savings &
Credit cooperatives. The Act further stipulates that a service cooperative must
also enter into at least 51 per cent of its transactions with its members.
The Namibia Consumer Protection Group is
proposing the establishment of the Namibian Savings and Credit Cooperative. The S&C Cooperative will act
as a financial institution, and have the specific objectives to encourage
savings and provide loan services.
About Namibia Consumer Protection Group (NCPG)
NCPG is a non-profit Namibian organisation
that campaigns for customer rights. It focuses on illegal and unethical
behaviour by Namibian companies. It also promotes the voluntary acceptance of
the Namibian Consumer Charter by businesses and government entities.
Objectives of the Namibian Savings & Credit Cooperative
The Namibian S&C Cooperative shall:
a)
promote the economic and social
interest of its members by providing effective services to its members
according to sound business principles;
b)
have non-discriminatory
voluntary membership;
c)
be democratic and controlled by
its members;
d)
entitle every member to have
one vote – regardless of the number of shares owned;
e)
provide services be primarily
to members;
f)
limit the dividends so most
profits are kept for the functioning of the cooperative; and
g)
provide ongoing membership
education.
Establishing a Cooperative
Members must be
- · at least 18
- · a citizen of Namibia, or ordinarily resident of Namibia
A primary savings and credit service cooperative
shall be formed by at least a seven members. The cooperative shall be governed
by its by-laws. These by-laws include information regarding the name, address,
type of cooperative, objectives, nature of business and place of business and
other information as stipulated by the Act.
In addition the by-laws will include
information on the liability of its members – in the case of the proposed
Savings and Credit Cooperative the liability shall be limited.
Upon establishment of a cooperative, a “Cooperative
Formation Committee” (minimum seven members) shall be present at a meeting to
elect a Chairperson, Secretary and Treasurer. The Formation Committee shall be
responsible for convening meetings with prospective members, draft the by-laws,
and submit the application for registration as a cooperative. Within one year,
a Cooperative Founders meeting shall be convened where a register of members
must be completed to be submitted with the application.
Objectives of the Namibian Savings and Credit Cooperative
The Namibia Consumer Protection Group is
proposing the establishment of the Namibian Savings & Credit cooperative
(S&C Cooperative). The primary purpose of the Cooperative is to reduce banks
costs and use discounts, loyalty rewards or any other form of remuneration
normally received by a banking institution for the lessening of members costs.
The S&C Cooperative will be managed as a
financial institution, and have the specific objectives to:
1.
Encourage thrift among members.
To encourage a saving habit, the cooperative currently offers two types of
savings:-
a.
Shares: All members are
required to pay monthly shares at rates agreed by the members.
b.
Deposits: Both current and
fixed deposits are generally offered to cooperative members.
2.
Provide loan services to
members. Members' shares and deposits comprise significant part the loan funds
made available to members with interest charged usually at rates lower than
that of the prevailing market rates. The general three types of loans provided
by this cooperative type are:
a.
Emergency loans: In crisis or
emergency cases, a member may borrow up to half of his/her monthly income,
depending on the cooperative financial status, without collateral. Repayment is
normally made in two instalments.
b.
Ordinary loans: The cooperative
can provide an ordinary loan, again, depending on its financial status. This
can be between 4 to 15 times, of member monthly income.
c.
Special loans: When the
cooperative extends its services to housing and investment purposes, a member
may borrow the actual amount required for constructing or purchasing houses,
land and other permanent investments
Legislation and Regulation vis-à-vis Financial Services
The Namibian Savings & Credit
Cooperative is not a bank in the traditional sense of the word and as stated in
the Cooperatives Act, “no provision of the Banks Act shall apply in relation to
a cooperative”. The Banking Institutions Act, 1998, further states “This Act
shall not shall not apply to … any co-operative society registered under the
Co-operative Societies Act, 1996”.
Practical Application
It is proposed that the Cooperative shall work
with a sponsor bank (preferably NamPost) and manage the accounts of its members
as a virtual banking wallet. A technical management contract will be negotiated
with a software development team to use a account management system via a
cellular device. The software will be based on the technical USSD or similar
standard.
The money in a members virtual wallet may
be used for purchases at participating retail outlets. In addition, certain
outlets will partner the Cooperative to provide cash disbursement at their
business.
Additional Services
The Cooperative will also provide a
personal data management system for its members. This will allow members to securely
store a data about themselves and set permissions for others (government,
legislative processes, private sector – for example potential employers, individuals,
etc.) to access the information in a controlled way.
Registration
The Ministry responsible for cooperatives
is the Ministry of Agriculture, Water and Forestry. Registration is submitted
to the Deputy Director of Co-operatives in the Directorate of Planning.
Rights and Responsibilities
In its essence, a cooperative belongs to
its members. Effective and efficient management of the cooperative is ensured
when members exercise their rights and responsibilities properly. The most
important responsibility of the individual member is attendance at the annual
general Meeting (AGM). The AGA gives him/her the opportunity to protect their
membership rights, a fair sharing of benefits and monitor the management of the
operations. It provides also a forum to determine general policies, elect
committee members and assign tasks to further benefit all the members.
Within the framework of cooperative
principles, laws and regulations and procedures, members must discuss problems
together, share ideas and exercise the right to vote on committees and meeting
resolutions.
