Financial Services Charter adopted

AS from Friday, local financial institutions have five years to ensure that 40 per cent of their ownership and control are in Namibian hands.

Within that period, 25 per cent of the executive management must be from broad-based economic empowerment (BBEE) background, of which ten per cent must be BBEE women. Also, 30 per cent of financial institutions’ procurement spending must be channelled towards BBEE suppliers.
These are just some of the voluntary targets set in the 33-page Namibian Financial Services Charter (NFSC), which was signed by 17 financial stakeholders in the historic Transformation Room of the Development Bank of Namibia (DBN) on Friday.
BBEE, in the NFSC terms, means black Africans, Basters or Coloureds, as well as Namibian citizens by birth or by naturalisation before March 21 1990.
‘This is not about colour. It is about transformation and inclusion,’ Monica Kalondo, the much-hailed driving force behind the NFSC, said.
‘It’s about doing the right thing,’ NFSC Chairperson Johannes !Gawaxab echoed.
Although a completely voluntary exercise on paper, the NFSC team didn’t beat around the bush about the dire consequences financial institutions not complying with the charter will face.
‘There will be no penalty. But institutions will feel it from a business point of view,’ !Gawaxab warned.
Maybe of these institutions rely on Government and parastatals for business and non-compliance to the NFSC will come at a price. The charter allows for a score-card system which can not only be use for self-assessment and BBEE progress in the sector, but which Government and the private sector can also use when awarding contracts.
The NFSC was born out of lack of sufficient progress to embrace BBEE in the local financial sector during the last 20 years.
‘It was just about the pursuit of profits. Financial institutions only looked after their own interests,’ Namibian Stock Exchange (NSX) General Manager John Mandy summed it up.
To which !Gawaxab added: ‘Many people did many good things. So we’re not saying there was no progress in the sector.’
The NFSC, which has been in the pipeline since 2005, spans over two phases: the first from May 29 2009 to March 31 2014, followed by the second phase until December 31 2019.
The charter has BBEE targets for human resource development, preferential procurement and enterprise development, as well as access and affordability of financial products and services.
It also sets targets for ownership and control, empowerment financing, corporate social investment (CSI), as well as consumer protection and education.