Consumer Credit Bill Poses a Threat to Microlenders

Gideon Kapuka

The proposed consumer credit bill in Namibia aims to bring about comprehensive changes to the regulatory landscape governing credit provision and agreements.

Its objectives include the consolidation, harmonisation and reform of existing laws, establishing consumer credit regulators, and the regulation of entities such as credit providers, credit bureaus and debt collectors.

In addition, the bill seeks to enhance consumer protection, promote responsible lending and borrowing practices, and ensure transparent market conduct.

While the necessity for such legislation is recognised, its introduction has evoked mixed sentiments among the business community.

Microlenders in particular perceive the impending amendments to the consumer protection framework as a significant threat to their operations.

This stems from the potential impact of the bill on their business models and transactions.

The Namibia Financial Institutions Supervisory Authority (Namfisa) undertook extensive stakeholder engagements in 2023, reaching out to various regions countrywide.

These engagements underscored the imminent implementation of the bill in 2024, prompting microlenders to brace themselves for the upcoming changes.

Microlenders, who play a key role in providing access to credit to underserved segments of the population, are concerned about how the bill will affect their ability to continue effectively serving their clientele.

The proposed regulations, particularly those related to interest rates, costs, fees, and other charges, pose challenges to the sustainability of microlending operations.

Moreover, the impending repeal of the Microlending Act of 2018 has exacerbated uncertainties within the sector.


The Microlending Act, which was tailored to address the unique needs and circumstances of microlenders, provided a regulatory framework conducive to their operations.

Its replacement by a broader consumer credit bill raises questions about the future regulatory environment and its alignment with the specific requirements of microlenders.

In response to these challenges, stakeholders within the microlending industry are advocating a balanced approach that preserves the interests of both consumers and microlenders.

They emphasise the importance of regulatory measures that foster financial inclusion, while also ensuring the sustainability and viability of microlending institutions.

As the implementation of the consumer credit bill draws closer, Namibia’s microlenders find themselves at a crossroads, navigating the complexities of regulatory compliance, while striving to uphold their mission of facilitating access to credit for marginalised communities.

The coming months will undoubtedly witness intensified dialogue and deliberation as stakeholders seek to shape the regulatory landscape in a way that supports the twin objectives of consumer protection and financial inclusion.

In conclusion, the consumer credit bill represents a significant step towards enhancing consumer rights and promoting responsible lending practices.

However, its potential ramifications for microlenders underscore the need for careful consideration and constructive dialogue to mitigate adverse impacts and safeguard the interests of all stakeholders.

  • * Gideon Kapuka is a researcher, writer, and business consultant;

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