Microlenders challenge N$500 000 penalty in court
Aiso Cash Loan, Focus Finance and 24 other microlenders have approached the Windhoek High Court to challenge penalties imposed under the Microlending Act, 7 of 2018, arguing that a fine of N$500 000 or up to five years’ imprisonment may be excessively harsh for non-compliance.
Under the Act, operating as a microlender without proper registration with the Namibia Financial Institutions Supervisory Authority (Namfisa) is a serious offence. Non-compliance, including failing to register, can attract penalties.
The case, which lists President Netumbo Nandi-Ndaitwah, the finance ministry, Namfisa, and four others as respondents, has been ongoing for seven years.
When the case was first set out in November 2018, the cash loan businesses also raised concerns that several provisions of the Act are unclear, overly strict and difficult to comply with. They argued that certain sections of the law needed to be amended to make compliance more practical, workable and fair.
"The parties in this matter reached consensus that the Act can be improved upon. There is common ground for fruitful discussions in respect of many sections of the Act. The plaintiff intends providing the defendants with a working draft of their proposals, based on the framework of the current Act, which the defendants will then consider,” a status report filed in 2021 reads.
In January, the parties indicated their intent to carry out a stated case, in which the High Court would be asked to consider whether the said inconsistencies under the Microlending Act, 7 of 2018, were excessive.
However, when the case returned to court earlier this week on Wednesday, lawyers for the respondents said they require more time to finalise the draft papers on the proposed stated case and requested another postponement, which was granted.
No basis
In their response to the case seven years ago, the respondents primarily challenged the manner in which the cash loan businesses pleaded their case. They argue that the particulars of claim submitted by the businesses were vague and failed to set out the material facts necessary to sustain a cause of action.
Furthermore, regarding the substance of the constitutional challenge, the defendants contend that the cash loan businesses have not identified which provisions of the Act purportedly result in arbitrariness, unreasonableness or the impermissible delegation of powers to the Minister and Namfisa.
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Under the Act, operating as a microlender without proper registration with the Namibia Financial Institutions Supervisory Authority (Namfisa) is a serious offence. Non-compliance, including failing to register, can attract penalties.
The case, which lists President Netumbo Nandi-Ndaitwah, the finance ministry, Namfisa, and four others as respondents, has been ongoing for seven years.
When the case was first set out in November 2018, the cash loan businesses also raised concerns that several provisions of the Act are unclear, overly strict and difficult to comply with. They argued that certain sections of the law needed to be amended to make compliance more practical, workable and fair.
"The parties in this matter reached consensus that the Act can be improved upon. There is common ground for fruitful discussions in respect of many sections of the Act. The plaintiff intends providing the defendants with a working draft of their proposals, based on the framework of the current Act, which the defendants will then consider,” a status report filed in 2021 reads.
In January, the parties indicated their intent to carry out a stated case, in which the High Court would be asked to consider whether the said inconsistencies under the Microlending Act, 7 of 2018, were excessive.
However, when the case returned to court earlier this week on Wednesday, lawyers for the respondents said they require more time to finalise the draft papers on the proposed stated case and requested another postponement, which was granted.
No basis
In their response to the case seven years ago, the respondents primarily challenged the manner in which the cash loan businesses pleaded their case. They argue that the particulars of claim submitted by the businesses were vague and failed to set out the material facts necessary to sustain a cause of action.
Furthermore, regarding the substance of the constitutional challenge, the defendants contend that the cash loan businesses have not identified which provisions of the Act purportedly result in arbitrariness, unreasonableness or the impermissible delegation of powers to the Minister and Namfisa.
[email protected]
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