Microlenders and low wages drive household debt - BAN

Banks alone are not responsible for the high levels of debt, as there are other financial pressures households face.

Bankers Association of Namibia chief executive Dantagos Jimmy said this on Friday when the association appeared before the National Assembly’s parliamentary standing committee on economy and industry, public administration and planning during a public hearing on household debt and lending practices.

The hearing followed a motion on whether existing laws adequately protect Namibians against exploitation by lending institutions and informal moneylenders, tabled last year.

Jimmy says income pressures, short-term borrowing and insufficient financial buffers are at the centre of the debt problem, as household incomes struggle to keep up with the cost of living.

She says payroll deductions are not the main problem, as they are regulated by law, but more needs to be done to improve financial literacy and help people manage their finances.