How the Banks Block Namibia’s Development

Many people in Namibia are like Ernest (or more correctly, Ernst Christian) from Mariental.

Ernest is a final-year information technology student at the Namibia University of Science and Technology.

Ernest is bright, hard-working and wants to start a business in the logistics sector, but like most young Namibians he has no start-up capital and does not have the right connections to access it.

I’ve known Ernest for almost three years, and my first impressions were that Ernest is a most earnest young man who knows the value of money and goes to church regularly.

He’s the sort of young man most mothers in Namibia would want for a son-in-law. But without money, his dreams are mere illusions.

So Ernest came to me with a plan to buy a car and work for ride-hailing company Yango until he can buy a second car.

He, however, has no money to buy a car, so I proposed to help him: I would provide him with roughly half the money he needs, or N$40 000 for a good quality imported car.

The other half would come from a bank loan that I offered to guarantee by providing the bank with a term deposit if Ernest failed to pay.

HOW THE BANKS ‘HELP’ THE POOR

We went to FNB Namibia, where we both bank, thinking that this was a completely riskless loan that the bank would be quite happy to help with.

If I was wrong about Ernest, I would repay the loan – not the bank’s shareholders.

We went to the bank’s SME unit and were politely shown the door.

Why would any bank turn down a riskless loan?

The reason given is because Ernest has no track record of depositing with the bank and has no money to deposit with it.

Outraged at this treatment I wrote to FNB’s management, which has otherwise been very helpful with social projects we undertook for the University of Namibia when I was an economics professor there.

For the last three months, Ernest has been paying the owner of car he uses as a Yango N$2 000 per week.

It takes him five days to earn US$3 000, and anything he makes by working six or seven days a week, he can keep. Under the circumstances, Ernest can be forgiven for not having much money in his FNB Namibia account.

The working man’s eternal lament is ‘I would be a millionaire if I didn’t have to eat and feed my family’.

FNB Namibia’s senior management replied that the criteria for qualifying for a loan are the following:

· affordability based on the applicant’s own income and repayment capacity,

· the individual’s ability to demonstrate and build their own credit history, and

· sustainable repayment behaviour that does not create the risk of over‑indebtedness.

“These requirements apply even in cases where a third party is willing to provide additional support or security. From a regulatory perspective, the primary borrower must independently demonstrate affordability and creditworthiness,” the bank says.

In other words, it is a regulatory matter, and that is the responsibility of the Bank of Namibia (BoN).

Ernest and I then approached both Standard Bank and Nedbank.

Both gave us the same response.

If you think three of the biggest banks in the country cannot afford extending a riskless loan to a young man who wants a head start, you should consider their profits.

In the 2025 financial year, FNB Namibia made a total profit of N$1.9 billion after tax.

Nedbank made an after-tax profit of N$588 million in 2025, while Standard Bank Namibia made N$1.19 billion. Clearly the shareholders of the banks are doing well, and so they should.

But Namibia’s young people are not doing well at all.

If Ernest did not have to pay the owner of the Yango N$2 000 per week and instead had a bank loan, he could deposit the money into the bank and pay off a loan, but he can’t get a loan because he can’t get out from under the cost of hiring the Yango vehicle from its owner.

Catch 22!

So, the banking system has clearly failed Ernest, simply because he is young and not rich – yet.

BON RESPONDS

For over a month I’ve repeatedly reached out to Bank of Namibia (BoN) governor Ebson Uanguta to ask how a riskless loan can be turned down.

As an economist, I know perfectly well that banks hate risk, but in this case there was no risk as I remained willing to underwrite the loan to help Ernest establish a credit profile.

Finally, after patiently waiting for over a month, I got a reply from a BoN legal officer saying: “It is a banking institution’s prerogative to grant credit to individuals . . . Such decisions are managerial in nature and the Bank of Namibia does not get involved in these matters as that would constitute regulatory overreach.”

So, FNB Namibia says it is a regulatory matter and the Bank of Namibia says it is purely a commercial matter.

Who is telling the truth?

THE BANKS AND THE PRESIDENT

President Netumbo Nandi-Ndaitwah has spoken about the need for the banking system to become more inclusive and to assist the Namibian youth on several occasions.

These are nice words, and given that it is the BoN’s job to set policy, it is the BoN and hence the government that are in effect blocking young Namibians from starting their own businesses.

Only if you are rich, are buying a house, or are well connected to the old white elite or the comrades, can you enter the banks.

If the president is serious about helping Ernest and others like him, she should inform Uanguta that this is just not good enough.

At least there was a happy ending for Ernest: I finally decided to fund the car for him, because his main alternative to the banks are Windhoek’s loan sharks who charge the highest interest rates since Jesus threw the money lenders out of the temple.

May God help those other young Namibians who do not have such help.

– Roman Grynberg is an adjunct professor at Griffith University in Australia and writes in his own capacity. The above piece is his personal opinion.

FNB responds:

‘LEGAL OBLIGATION, NOT OBSTRUCTION’

FNB Namibia yesterday strongly rejected Grynberg’s suggestion that the bank is deliberately obstructing youth entrepreneurship or acting contrary to Namibia’s laws and policy objectives.

“Such assertions are inaccurate and risk misleading the public about how Namibia’s banking system operates and the legal obligations under which it functions.

“FNB Namibia, like all licensed banking institutions in the country, is legally bound to comply with the Banking Institutions Act, the regulations and directives issued by the Bank of Namibia, and the principles of responsible lending. These laws are enacted . . . to protect consumers, ensure financial stability, and prevent unsustainable debt accumulation,” FNB Namibia spokesperson Kirsty Watermeyer says.

She says banks are not permitted to disregard these requirements at will, nor can they selectively apply them based on personal circumstances or third‑party assurances.

The loan referenced in professor Grynberg’s article was not rejected arbitrarily, nor was it declined due to indifference toward entrepreneurship or youth development, Watermeyer says.

It was assessed using the same criteria that apply to all retail credit applicants across the Namibian banking sector. These include the borrower’s own affordability, income sustainability, and demonstrated capacity to service debt independently, she says.

“The suggestion that a loan becomes ‘riskless’ because a third party offers informal support or assistance reflects a misunderstanding of banking law and credit regulation. Under Namibian regulations, the primary borrower must be able to demonstrate affordability and creditworthiness in their own right. This requirement exists to protect borrowers from entering formal debt arrangements that may place them at financial risk.”

FNB Namibia did not act alone in this matter, Watermeyer says.

“As acknowledged in the article itself, multiple banks reached the same conclusion independently. This is not evidence of collusion or systemic obstruction; it is evidence of a shared regulatory framework applied consistently across the industry,” she says.

She says it is also incorrect to imply that the Bank of Namibia or government is somehow being defied or ignored by commercial banks.

“On the contrary, banks are obligated to operate within the framework set by the regulator and the legislature. The Bank of Namibia does not approve individual loans, nor does it instruct banks to override affordability assessments. Credit decisions are managerial decisions taken within regulatory boundaries, not outside them.”

FNB Namibia remains deeply committed to financial inclusion and youth empowerment, Watermeyer says.

That commitment is reflected in the bank’s investments in financial education, entry‑level products, youth‑focused accounts, SME support programmes, and credit‑building pathways designed to help first‑time borrowers responsibly enter the formal financial system, she says.

“Equating responsible lending with discrimination or institutional failure is not only incorrect – it risks undermining public confidence in a financial system designed to safeguard both consumers and the economy.

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