Namfisa warns against unlawful retention of borrowers’ documents

The Namibia Financial Institutions Supervisory Authority (Namfisa) has issued a stern caution against the retention of borrowers’ sensitive documents.

In a press release issued earlier this week, Namfisa chief executive Kenneth Matomola said consumers of financial services are often the most vulnerable members of the financial system.

“It is the job of the financial regulator to ensure that they are treated fairly and are protected against market abuse.”

According to Matomola, Section 23 of the Micro Lending Act prohibits the retention of bank cards, PIN codes, original identification documents, passports and driving licences by microlenders.

This directive, outlined in the Micro Lending Act of 2018, aims to protect customers from falling victim to unscrupulous practices prevalent in the microlending sector.

Matomola said the retention of documents could facilitate market conduct abuse, thereby compromising the integrity of Namibia’s financial system.

While acknowledging that the retention of bank cards, PIN codes, and original identification documents may not always indicate misuse beyond loan repayments, Namfisa spokesperson Victoria Raimond said consumers are exposed to a real risk of the unauthorised use of their bank cards and other retained original documents.

“The authority recognises the importance of preventive measures and cannot afford to wait for a loss to occur before taking the necessary actions,” said Raimond.

She added that consumers stand to benefit from Namfisa’s protective measures, which are enshrined in appropriate legislation.

Raimond said as per the Microlending Act 2018, those operating microlending businesses without proper registration are committing an offence.

“Any person who conducts the business of a microlender without being registered in terms of this act commits an offence and is liable on conviction to a fine not exceeding N$500 000 or to imprisonment for a period not exceeding five years, or to both such fine and such imprisonment.”

Namfisa urged both the public and money lenders to adhere strictly to these regulations, emphasising the critical role the authority plays in upholding consumer rights and maintaining the integrity of Namibia’s financial landscape.

e-mail:shania@namibian.com.natwitter:@ShaniaLazarus