Beware unregistered microlenders

A microlender is an entity that provides small, short-term loans to consumers.

Under the Microlending Act, all microlenders must be registered and supervised by the Namibia Financial Institutions Supervisory Authority (Namfisa) to operate legally.

Registration ensures that lenders comply with legal requirements, including fair interest rates, proper loan agreements, and responsible lending practices.

Using unregistered lenders exposes consumers to unlawful practices, excessive charges, and the risk of losing legal protection.

Registered microlenders must operate transparently and fairly.

They must clearly disclose interest rates, fees, and repayment terms upfront, and they can only charge amounts permitted by law.

They cannot retain personal documents, bank cards, or PINs as security.

They must also provide proper loan documentation and treat borrowers ethically.

Any lender operating outside these requirements is acting unlawfully, and consumers are advised to avoid such lenders.

Consumers should always verify a lender’s registration status before borrowing.

This can be done on Namfisa’s website, which maintains an updated list of all registered microlenders.

If a lender cannot prove registration, or pressures a consumer into quick decisions or refuses to provide written agreements, these are red flags.

Borrowers should report such cases to Namfisa immediately.

Borrowing from unregistered lenders exposes consumers to several risks, such as excessive fees or hidden charges that are not legally capped, abusive or unfair debt-collection practices, including harassment, and the loss of legal protection, meaning the borrower has limited recourse if disputes arise.

The Microlending Act exists specifically to protect consumers and ensure responsible lending.

Engaging with registered lenders safeguards your rights and financial well-being.

The key advice is simple: Borrow responsibly and verify before you borrow.

Only use lenders registered with Namfisa.

Always read and understand your loan agreement, avoid lenders who pressure you, and report any suspected illegal activity.
Responsible borrowing starts with choosing a legally compliant, regulated microlender.

Consumers who are informed and cautious are empowered to protect themselves from financial exploitation.

– Junias Erasmus is a consumer education specialist at Namfisa.

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.