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DO NOT FORFEIT YOUR PIN, BANKCARD NOR YOUR ID TO MICROLENDERS

By: Nghiinomenwa Erastus

It is illegal for microlenders to confiscate borrowers’ documents such as bank cards, PIN codes, and original identification documents.

That particular action has been prohibited since 1 March 2012 by the microlenders regulator, Namibia Financial Institution Supervisory Institutions (Namfisa).

This is a cautious reminder from Namfisa to the public on microlenders illegally retaining possession of bank cards and PIN codes, original identification documents, original passports, and original driver’s license of borrowers.

Namfisa consumer education manager Victoria Muranda said the act protects microlending customers from exploitation.

She said the consumers of the financial services are 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.

This is done through the enforcement of the Microlending Act of 2018.

Muranda highlighted that the retention of bank cards and PIN codes, and original identification documents enable increased market conduct abuse.

“The fact that lenders keep the bank cards and PIN codes or original identification documents does not necessarily imply they will use these items for anything other than collecting payments on their loans,” she said.

However, consumers, on the other hand, face a genuine risk of their cards being used for different reasons, and the regulator cannot wait until a loss occurs before taking preventative actions.

According to the Microlending Act, 2018, a defaulter should be penalized with a 5% default interest charge for up to three months. They can be handed over to debt collectors or lawyers.

Muranda cautioned that before handing over the defaulting borrower, they must be informed of the lender’s intention 28 days before the handover.

Though each lender has its method of dealing with defaulters, the regulator reminded that the provisions of the Microlending Act must be followed.

Muranda further advises that lenders cannot require borrowers to sign documents without an agreement between the two on the loan terms.

Microlenders found guilty of contravening the Microlending Act, which is to keep or make use of bank cards or personal information such as bank cards, PIN codes, original identification documents, as security or for collection arrangement purposes, is liable to pay penalties.

The penalties are calculated at 10% of the annual value of loan disbursements in the immediately preceding financial year.

Those operating illegal/unregistered loan shops as defined by the act will be 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 such imprisonment.

Borrowers are encouraged to contact Namfisa and report microlenders that insist on keeping their bank card and PIN. Email: erastus@thevillager.com.na

 

Julia Heita

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