Predatory and unsustainable: MP takes aim at banking sector
In a scathing rebuke of Namibia's financial system, member of parliament Inna Hengari moved a motion in Parliament to address what she termed a national debt crisis, arguing that the current architecture is "predatory, extractive, and unsustainable".
Hengari contended that the banking sector's growth has come at the expense of ordinary Namibians, leaving households to "crumble" under the weight of debt. She proposed a "multi-dimensional response" that would "reimagine the system itself," starting with a mandatory amendment to the Banking Institutions Act.
“I propose a multi-dimensional response that does not merely apply band-aids but reimagines the system itself. First, we must amend the Banking Institutions Act to cap interest rates within reasonable and humane thresholds,” Hengari said.
Hengari further called on regulators to act with purpose once the draft regulations on fees and charges are rolled out, and ensure enforcement.
“The draft regulations on fees and charges, already finalised and consulted upon, must be enforced with real consequence. These are not technical reforms; they are moral imperatives. No family should pay back double what they borrowed just to keep their lights on,” she said.
According to Hengari, it was necessary to ensure enforcement to ensure that the banking sector helps grow households in a manner that was not opportunistic, and called for the widening of the powers of the Bank of Namibia to enforce greater protectionist mechanisms against customers.
“A banking sector that grows while households crumble is not resilient, it is predatory, it is extractive, and it is unsustainable. Second, the Bank of Namibia must expand its regulatory jurisdiction to include informal lenders, digital loan apps, and microfinance operators. Regulation without reach is rhetoric, enforcement without equity is oppression,” she said.
While a profitable financial sector was a welcome sign, it should not come at the expense of the general public, Hengari cautioned.
“We cannot reform what we are unwilling to interrogate. We cannot address financial exclusion by merely expanding access to predatory credit. We must confront the deeper logic that allows profitability to be decoupled from equity. The establishment narrative tells us that a well-capitalised financial sector is a sign of national strength, but if capitalisation comes at the cost of dispossession, if profit rests on the broken backs of the indebted then we must reject this paradigm,” Hengari said.
Hengari contended that the banking sector's growth has come at the expense of ordinary Namibians, leaving households to "crumble" under the weight of debt. She proposed a "multi-dimensional response" that would "reimagine the system itself," starting with a mandatory amendment to the Banking Institutions Act.
“I propose a multi-dimensional response that does not merely apply band-aids but reimagines the system itself. First, we must amend the Banking Institutions Act to cap interest rates within reasonable and humane thresholds,” Hengari said.
Hengari further called on regulators to act with purpose once the draft regulations on fees and charges are rolled out, and ensure enforcement.
“The draft regulations on fees and charges, already finalised and consulted upon, must be enforced with real consequence. These are not technical reforms; they are moral imperatives. No family should pay back double what they borrowed just to keep their lights on,” she said.
According to Hengari, it was necessary to ensure enforcement to ensure that the banking sector helps grow households in a manner that was not opportunistic, and called for the widening of the powers of the Bank of Namibia to enforce greater protectionist mechanisms against customers.
“A banking sector that grows while households crumble is not resilient, it is predatory, it is extractive, and it is unsustainable. Second, the Bank of Namibia must expand its regulatory jurisdiction to include informal lenders, digital loan apps, and microfinance operators. Regulation without reach is rhetoric, enforcement without equity is oppression,” she said.
While a profitable financial sector was a welcome sign, it should not come at the expense of the general public, Hengari cautioned.
“We cannot reform what we are unwilling to interrogate. We cannot address financial exclusion by merely expanding access to predatory credit. We must confront the deeper logic that allows profitability to be decoupled from equity. The establishment narrative tells us that a well-capitalised financial sector is a sign of national strength, but if capitalisation comes at the cost of dispossession, if profit rests on the broken backs of the indebted then we must reject this paradigm,” Hengari said.
