The Namibia Financial Institutions Supervisory Authority (Namfisa) has recovered more than N$1.4m in benefits claims and refunds paid by financial institutions to customers who lodged complaints in 2013.
The majority of this money was recovered from pension funds and micro-lenders that collectively paid out more than N$850 000 in claims.
During the 2013 financial year Namfisa’s Complaints department received a total of 366 complaints compared to 422 complaints in 2012.
Namfisa said this significant decrease in complaints indicated improved levels of market conduct by financial institutions and its representatives resulting in more satisfied customers. Most of these complaints were directed to micro lenders who received a total of 167 complaints of which 166 were resolved. CEO of Namfisa Phillip Shiimi said that this was due to an increase in Namibians using micro-lenders.
Namfisa also revealed that plans to appoint a financial ombudsman who is expected to deal with queries between consumers of products in the non banking financial sector is at an advanced stage. The idea of the financial ombudsman will be enacted as a law and is still with the legal drafters and thereafter will have to be submitted to the national assembly for debate and enactment into a full law.
Of the 366 complaints received Namfisa was able to resolve 96% of them. This percentage exceeded the complaints departments’ goals as they aim to resolve only 80% of all complaints received within the year on a quarterly basis. Complaints received by Namfisa ranged from overcharged interest, non-payments of pension benefits, over payments on loans, illegal deductions and non-cancellations of contracts.
Namfisa also imposed a total of N$2.6m in penalties to financial institutions in the 2013/14 financial year. Most of these penalties were imposed onto pension funds which incurred more than N$1.5m in penalties. Long term insurance companies incurred penalties of more than N$800thousand and short term insurance incurred penalties more than N$130thousand.
FIM bill drafting
Namfisa is also instituting the drafting of the Namfisa and Financial Institutions bills (FIM) that started a few years ago and has underwent several rounds of consultation with stakeholders including regulated entities and cabinet committee on legislation.
“The bills are now with the legal drafters in the Ministry of Justice for finalization. Once promulgated, the new law will provide Namfisa with adequate regulatory and supervisory powers. The promulgation of the FIM Bill will play a major role in the deepening and development of financial markets” CEO of Namfisa Phillip Shiimi.
The authority has completed 79 subordinate legislation to accompany the FIM bill. These regulations and standards will be in layman’s draft format and will be converted into legal drafts. Once this has finalised standards and regulations will go through industry review and consultations,
This new legislation allows for the flexibility and swift response to industry development which will lead to greater innovation in offering financial products and services to the benefit of both consumers and the financial institutions involved.
Namfisa has also finalized the first draft of the Financial Services Ombudsman (FSO) bill. It will be a separate piece of legislation from those administered by Namfisa and the new authority will be headed by a Financial Ombudsman. The FSO bill is currently undergoing its final round of reviewing with the Ministry of Finance. The process will be followed by wide consultations with various stakeholders.
“The financial services ombudsman will be a statutory officer who deals independently with complaints from consumers about their individual dealings with all financial services providers” Shiimi said.
Namfisa’s total income for the year ended 31 March 2014 was N$116.4m and expenditure was N$94.2m generating a net surplus income of N$24.3m.
Income for the financial year was 13% higher than the initial budget, whilst expenditure for the period ending 31 March 2014 is 8% lower than the initial budget.
Factors contributing to the higher income could be attributed to higher base levels, penalty fee income due to a more focused campaign to drive compliance and concerted efforts to enhance interest earnings to maximise returns, through swift action and taking advantage of competitive interest rates.
The assets of the authority also increased to N$247.7m as at 31 March 2014 compared to N$217.1m at the same period last year.
Namfisa has also crafted a ladder of intervention comprising of 5 stages of supervisory intervention.
Namfisa has also registered a total of 487 institutions. Of these 487 institutions, 16 are long term insurance companies, 12 short term insurers, 121 pension funds, 267 micro lenders. Namfisa also recorded a total 47 deregistration’s with micro lenders at the forefront again with 22 deregistration.