The Bank of
Namibia (BoN) announced on 29 August 2013 that the proposed draft regulations
to regulate credit bureaus in Namibia are now open for public consultation. The
BoN states “There has been recent speculation in the media around whether or
not credit bureaus are illegal in Namibia. The Bank of Namibia’s view is that
the existing credit bureaus in Namibia are legal entities registered in
accordance with the relevant laws by the Ministry of Trade and Industry.
What is a credit bureau?
Present situation in Namibia
Who are credit providers?
Credit providers
Utilities
An organ of State, court
or judicial officer
Local Authorities
Public Consultation
Process
That means
they are not illegal. What is missing in our legal system at the moment is a
specific law regulating how these entities should manage the information under
their care, and there is no centralized credit information system that allows
banks and other lenders to know the total exposure per client and their credit
history so as to avoid overextending of consumers.”
What is a credit bureau?
A credit
bureau (sometimes called consumer reporting agency or credit reference agency)
is a company that collects information from various sources and provides
consumer credit information on individual consumers for a variety of uses. Credit
information such as a person’s previous payment of loans or accounts is a
powerful tool to predict their future behavior. Through the collection of such
information lenders such as banks and micro-lenders can assess credit
worthiness, the client’s ability to pay back a loan. This information can also affect
the interest rate and other conditions of a loan.
Present situation in Namibia
Currently Namibian
credit providers are under no obligations to supply information to credit
bureaus. It is against that background that the proposed regulations will seeks
to establish rights and obligations of credit bureaus to be registered and licensed
by the Bank of Namibia. It is also proposed by the BoN that all credit bureaus
are to have a centralized system. Such a system should have the capability of
calculating total credit exposure per client, and requires that all credit
providers are to supply information to all credit bureaus. The Regulations also
provide clear guidelines pertaining to the kind of data to be collected, the
period of time information can be kept (retention period) etc.
Who are credit providers?
The Bank of
Namibia has also defined who the sources of credit and non-credit information
that are obliged to provide information to all credit bureaus that meet the
qualifying criteria as set out in the proposed Regulations.
Credit providers
- Commercial banks
- Micro lenders
- Retailers providing credit
Utilities
- Regional Electricity Distributors (REDs)
- Bulk water suppliers
- Telecommunication companies
An organ of State, court
or judicial officer
Information on Debt Judgments, non-payment of
Maintenance or debt owed to a government department[1]
The
regulations further states For the purpose of building data bases for SMEs, a
credit bureau may collect and receive non-credit information from suppliers
whose participation in the credit information system may be voluntary and the
following categories are listed.
Local Authorities
- Municipalities
- Town Councils
- Village Councils
Public Consultation
Process
The Bank of
Namibia is therefore inviting all stakeholders and most importantly the general
public to present their input to the Bank of Namibia for consideration. The
public members/stakeholders are advised to make written submissions on the
entire Regulations by or before 26 September 2013.
Written
submissions on the Regulations can be done on the Bank of Namibia website at
www.bon.com.na, or if confidentiality is requested, comments can be emailed to
ndangi.katoma@bon.com.na. Further queries pertaining to this can be directed
Mr. Ndangi Katoma, Director: Strategic Communications & Financial Sector
Development, telephone number 061-283 5114.
Milton Louw is a consumer activist that has
been advocating the creation of a national credit bureau (with the necessary
consumer protections) since 2006 in a submission to the Parliament of Namibia.
He is the voluntary Director of the Namibia Consumer Protection Group and all
opinions expressed in this article are his own.
