Easier finance for vulnerable Namibians

Thousands of Namibians, including more than 150 000 pensioners, are often overlooked by banks and microfinance institutions.

17 June 2020 | Banking

[This] will enable us to support pensioners who wish to launch small business or simply improving their living conditions and those of their family members

Phillepus Uusiku – The more vulnerable and unbanked segments of the Namibian population are set to benefit from a concessional loan of N$235 million Namibia Post Ltd (NamPost) secured from Agence Française de Development (AFD).

The two institutions yesterday signed the agreement in Windhoek.

NamPost utilised it balance sheet to borrow the millions. The entire amount will be transferred to PostFin, a subsidiary of NamPost, for micro finance to pensioners, as well as low-income earners.

The deal further supports PostFin’s strategy of targeting more vulnerable and underbanked segments of the Namibian population and reach a market share within pensioners of about 20 to 30% over the next five years.

NamPost has a total of 136 points of representation countrywide, of which more than 300 000 individuals have bank accounts with the institution. The majority of this individuals are low-income earners.

On a monthly basis, more than 100 000 social grant recipients receive their social grants through NamPost. Indeed, in 52 villages, towns or settlements NamPost is the only financial services provider.

Financial inclusion

The French ambassador to Namibia, Claire Bodonyi, pointed out that the loan will promote financial inclusion in the country by reaching out to thousands of pensioners who can’t access credit facilities from banks and microfinance institutions.

Bodoyi added that it will contribute to the socio-economic resilience of Namibia and will, to a certain extent, mitigate the effects of the Covid-19 crisis, which makes access to financing even more challenging.

Financial inclusion for individuals has increased remarkably in recent years with Namibia standing out for a high percentage of banked individuals.

Pensioners

However, a significant part of the country’s population, including more than 150 000 pensioners, remain a largely excluded segment and is often overlooked by banks and microfinance institutions.

This makes them financially vulnerable and unable to actively participate in the country’s economy.

The chief executive officer of NamPost, Festus Hangula, said he strongly believes that pensioners have a great role to play in the society.

“This partnership with ADF, coupled with the expertise of our subsidiary PostFin in providing financial services to low-income population, will enable us to support pensioners who wish to launch small business or simply improving their living conditions and those of their family members,” Hangula added.

Technical assistance

ADF is also discussing with NamPost to provide technical assistance to the maximum value of approximately N$3.8 million to increase PostFin’s practices in terms of client’s protection, and support the diversification of its products, as well as corporate with other microfinance stakeholders in Africa.

This project is fully in line with the wishes of the Namibian regulators and government to promote economic growth that will benefit the most vulnerable members of society and thereby enhance social inclusion.

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