Govt urged to reform the financial sector

Govt urged to reform the financial sector

ECONOMIST Martin Mwinga has called upon the Government to seriously consider reformation of the financial services sector.

Speaking in an interview with The Namibian, Mwinga said there was a strong need for Government to step in and reform the sector, considered one of the most critical in enhancing national development. The First National Bank (FNB) investment banker expressed dissatisfaction at the Namibian scenario, saying there was a lack of innovation.He said the market lacked access to leading instruments allowing the public to raise capital for starting up businesses.”I must honestly say that some financial institutions are not as innovative in coming up with products tailor made to specific market segments,” said Mwinga.Because of this lack of innovation, the public has been forced to rely on traditional banking instruments for borrowing, which remains a nightmare for those without collateral.Mwinga said although banks had tried to respond to the need by setting up small-to-medium enterprise (SME) departments, more still needed to be done.The banker said there existed a vacuum on the financial services sector that needed to be filled.Mwinga called upon the Government to pave the way for reform in the financial services industry.He said in most cases the country’s banks were largely dominated by foreign institutions and management that was not passionate about steering economic development.”There is a strong need for the Government to step in and reform the financial sector in this country.This can be done in various ways but most importantly resources should be set aside to support such a process.Offering either penalties or incentives can be one way of pursing the strategy,” explained Mwinga.In his view, the treasury should dedicate money to support the development of such initiatives as venture capital and private equity.Setting up SME-related banks or financial houses was one idea that has been thrown around for a while but Mwinga said such initiatives have been met with an unfavourable legal environment.The First National Bank (FNB) investment banker expressed dissatisfaction at the Namibian scenario, saying there was a lack of innovation.He said the market lacked access to leading instruments allowing the public to raise capital for starting up businesses.”I must honestly say that some financial institutions are not as innovative in coming up with products tailor made to specific market segments,” said Mwinga.Because of this lack of innovation, the public has been forced to rely on traditional banking instruments for borrowing, which remains a nightmare for those without collateral.Mwinga said although banks had tried to respond to the need by setting up small-to-medium enterprise (SME) departments, more still needed to be done.The banker said there existed a vacuum on the financial services sector that needed to be filled.Mwinga called upon the Government to pave the way for reform in the financial services industry.He said in most cases the country’s banks were largely dominated by foreign institutions and management that was not passionate about steering economic development.”There is a strong need for the Government to step in and reform the financial sector in this country.This can be done in various ways but most importantly resources should be set aside to support such a process.Offering either penalties or incentives can be one way of pursing the strategy,” explained Mwinga.In his view, the treasury should dedicate money to support the development of such initiatives as venture capital and private equity.Setting up SME-related banks or financial houses was one idea that has been thrown around for a while but Mwinga said such initiatives have been met with an unfavourable legal environment.

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