Central Bank Fails The Poor

THE Bank of Namibia as a regulating body for commercial banks has failed to control commercial banks regarding property loans.

Our central bank has turned a blind eye to commercial banks’ real estate financial regulations and policies. What the commercial banks are practicing now is hurting many poor Namibians and making it difficult for them to acquire home loans because of their cumbersome policies.We have a problem of politicians preaching about poverty alleviation, improving social economies and addressing the informal settlement problems. I regard this as a problem because our politicians only read what is written in their speeches but don’t put it in practice. There is no strategy in place to convert those dreams into reality and that’s why we still have this problems. Technical people should be tasked to research what exactly is happening at the ground level regarding the housing problem and then address the problem.What commercial banks do is against low income earners – their policies dictate that they only finance property above N$200,000 and that if it’s an NHE (National Housing Enterprise) house with no ceilings, geyser and tiles it’s not up to standard and the purchaser must top up to improve the property so that the bank will finance the applicant. The commercial banks credit procedures favour more those who are already well off and sideline the poor by reasoning that they are not credit worthy and that there is too much risk.Why do banks come up with such policies? Simply to increase their profits by requiring applicants to borrow more and pay more interest in return. The issue of risk is also not reasonable; property credit risk is not as high as other loan facilities (easy loans) because property stand as security and in the mortgage bond agreements there are terms dictating that the bank can repossess the property in case of failure to pay. The banks always recover all their costs whenever things get to such extent.All the Bank of Namibia needs to do for our commercial banks to do away with their anti-low income earners policies is to stop them.Ben ShigwedhaBy email