Entrepo finance fights ministers over government salary deductions

At the end of the second quarter of the year, government employees owed Entrepo Finance N$2.2 billion.

This is according to the quarterly report by the Namibia Financial Institutions Supervisory Authority.

The majority shareholder and beneficiary of this debt is Capricorn Group which owns 55.5% in Entrepo Finance.

Capricorn is not the only bank playing in the microlending space; in 2022 Standard Bank entered the space through an investment in Letshego.

Entrepo is one of the largest microlenders for permanent employees in the government.

Last week Entrepo filed an urgent case and is suing the minister of finance, the prime minister and various other parties in an attempt to stop a plan to discontinue the government’s payroll deductions management system.

The payroll deduction system allowed Entrepo to have repayments of loans granted by them deducted directly from the salaries of government employees.

Therefore, a discontinuation might lead to non-performing loans.

According Entrepo group chief executive Leonard Louw, over the last year and a half, about 47% of the value of all microloans provided by Entrepo was used for education, 12% was used for housing, 11% for business and about 5% for medical expenditure.

The discontinuation of deduction codes on the system is “irrational, irregular and reviewable”, and also unreasonable and disproportionate, says Louw in a sworn statement filed at the court.

As at the end of the second quarter the total loan book value of the microlending sector was N$7.8 billion.

In the last three months, Namibians borrowed N$1.5 billion from cash loans.

“Total loan disbursement increased by 4.7% quarterly and 25.6% yearly, reaching N$1.5 billion. This growth was driven by higher disbursements from both term lenders and payday lenders,” reads the report.

The average disbursement for term lenders increased to N$33 193. Meanwhile, the average disbursement for payday lenders was N$4 020.

According to the report, the total number of borrowers was 241 369, up 34.0% from the same quarter in 2024 despite a 6.9% decline compared to the first quarter of 2025.

The majority of these were made up of term lender loans, which make up 93% of the total loan book.

The number of new loans issued increased to 179 519, a 1.8% increase the last three months and a 3.2% annual increase.

Payday lenders made up the majority of the new loan issuance, accounting for 85.0%, while term lenders issued the remaining 15.0%.

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