Mixed feelings on FNB Easy Loan

MARIA SHAANIKATHERE are mixed feelings about the First National Bank of Namibia’s temporary cash loan scheme that clients can access directly at automated teller machines.

FNB launched the instant loan scheme in September last year as part of improving services.

The bank’s spokesperson, Elzita Beukes, said the temporary loan solution was a response to requests for easily accessible loans.

She explained that the loan is readily available, and is accessible 24 hours a day for customers who qualify based on good banking behaviour, and could be used in case of an emergency.

“The temporary loan solution is linked to a customer’s affordability over six months,” Beukes said, adding that the deduction “will occur automatically with their next incoming deposit”.

The bank charges 1,4% of the amount as administration fees.

She added that the loan is payable within 31 days. If a customer fails to pay, the bank will start charging interest, and make efforts to recover the money.

Beukes said the loan service has been excellent, “and customers have had no difficulties in repaying the loan, as it is granted based on the customer’s affordability, behavioural scoring and credit record”.

The Bank of Namibia spokesperson, Kazembire Zemburuka, said the facility would follow the normal processes in terms of ascertaining the creditworthiness of any client before approving such a temporary loan.

The central bank, however, “does not foresee any risks associated with this lending practice going up as the required risk management and control measures would still be in place,” Zemburuka said

The bank advises the public to reduce consumption expenditure and only borrow for productive purposes such as purchasing of a residential property and other productive activities.

“Namibians should embrace the habit of saving and acquiring items such as clothing and furniture on savings and investments made,” Zemburuka added.

One of the clients, Nestor Hamalwa, said the loan scheme is a good idea because it helps people in emergencies.

“It is a good thing because you don’t need to join the long queues, the money is readily available. But if you cannot control your spending, you might end up in debt, regardless of your credit profile,” he added.

Hamalwa, however, said the repayment period is too short, and if the borrower is not careful, they will end up not being able to cover the following month’s usual expenses.

Another client, Johannes Haidula, said the repayment period is fair, and that one can control how much to borrow.

Both Hamalwa and Haidula said they had not accessed the cash loans, though.

A client, who refused to be named, said the cash loan is not a good idea for people who cannot manage their money.

“People will end up with a big gap between their expenses and settling the loan. It will be much better if the repaying period could be much longer than 31 days,” the client reasoned.

Another client who used the service said he was not impressed because the bank deducted the loan two weeks after he had accessed the loan.

The client said he thought the bank would wait until 31 days to deduct their money.

The public, he advised, should only use the service when they are sure they can afford the repayment.

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