Can fintechs thrive in Namibia?

The Bank of Namibia has strategically paved the way for non-banking institutions to provide essential financial services, signalling a shift toward a more inclusive economy under the Payment System Management Act.

While some domestic banks show an increasing appetite to collaborate with fintechs to reach the banked and unbanked, a significant challenge remains in the reliance on BIN sponsorship.

According to McKinsey & Company, a fintech is a company that uses technology to provide functions ordinarily provided by financial institutions.

The goal is to make operations faster, more efficient, accessible and user-friendly for both consumers and businesses.

A BIN sponsor is a licensed banking institution that lends its bank identification number (the first digits on a payment card) to a fintech, allowing the non-bank entity to process transactions and issue cards through major networks like Visa or Mastercard without holding a full banking licence.

This dependency ensures security but often creates a bottleneck for agile start-ups like PayPoint trying to scale quickly in a market still dominated by traditional infrastructure.

Currently, Namibia’s fintech landscape is home to approximately 28 licensed payment service providers, a modest figure compared to the thousands of start-ups across the African continent.

Fintechs exist because they solve the speed-to-market problem that traditional institutions struggle with.

They offer lower-cost, specialised solutions for a population that is more than 65% mobile-connected yet remains significantly underbanked, opening the door to such solutions.

This market shift was accelerated by the global pandemic, which proved that digital resilience is the only way to future-proof an economy.

Consumer safety is paramount to United PayPoint

The path to innovation in a regulated environment is a marathon, not a sprint.

It has taken United PayPoint almost three years to secure full authorisation from the Bank of Namibia, reflecting the rigorous regulatory framework in place to protect consumers.

These high barriers to entry ensure that companies have the financial stamina and technical capability to safeguard Namibian wealth.

Namibia is currently witnessing a decisive shift from brick-and-mortar operations to digital-first banking, where convenience is no longer a luxury but a requirement.

We can look to mature African markets like Kenya and Nigeria for a roadmap: Kenya’s success with M-Pesa taught the world that simplicity and local context are more important than sophisticated tech.

At the same time, Nigeria's interoperability frameworks show how collaboration can prevent market fragmentation.

For Namibia to thrive, we must move beyond merely digitising old processes and instead build ecosystems where payments, micro-loans and savings are integrated into the daily lives of every citizen, regardless of their proximity to a physical branch.

As we stand at a digital crossroad, one question remains for the architects of our economy: is the Namibian financial sector agile enough to prioritise collaborative innovation over traditional competition? 

In our view, the Bank of Namibia could consider regulations that mandate traditional banks to sponsor a specified number of fintechs to promote collaboration and growth in financial technology.

*Halima Kyababa Head: Financial Technology, Compliance & HR United PayPoint (Pty) Ltd & United Africa (Namibia) (Pty) Ltd