The latest Simonis Storm Securities (SSS) money and banking statistics figures show the household debt edged higher to 14.84% last November, representing the highest annualised growth since January 2007.
Instalment credit has grown by 15.20% year-on-year, then overdraft with 12.8% while mortgages have grown by 12.61%.
SSS says the low interest rate environment seems to be the main catalyst for debt growth; “Our expectation is a gradual increase in interest rates in 2014, which may unfortunately put pressure on the already indebted consumer.”
In this environment of increased household debt levels, Bank Windhoek Namibia (BWN) notes the importance of financial literacy, which should also be extended to the younger generation, should teach how to develop a culture of saving.
Within the past two years, a Financial Literacy Initiative (FLI) has been disseminating financial information and raising awareness to the public on the importance of spending wisely.
The initiative, which was endorsed by the Ministry of Finance, got the applause of various financial institutions. FLI partnered with those institutions to introduce it to SME owners and low income earners.
Financial institutions have since embarked on various projects to promote financial literacy amongst children and the youth at large, with BWN amongst others donating 1000 smiley money boxes to the FLI, to encourage children to learn how to save at a young age.
Standard Bank Namibia (SBN) has partnered with the Youth Entrepreneurship Seminars (YES) for the past six years, to equip the youth with basic business financial literacy while First National Bank (FNB) Namibia has also partnered with the Aflatoun programme, which facilitates child social and financial education.
Bank Windhoek communication practitioner, Toivo Mvula, states, “Teaching children about the value of money at a young age will give them an understanding of what it means to save, do financial planning, as well as steer away from bad or unnecessary debts when they become working adults.”
With regard to the new academic year, BWN now offers a Bank Windhoek Solo Account, tailor-made to fit the needs of children and young adults of up to 18 years of age.
The solo account’s benefits include free monthly service and free ATM withdrawals at Bank Windhoek ATMs. It furthers give access to cell phone banking for features such as airtime top-ups and payments to beneficiaries.
It will have favorable interest while offering free balance enquiry and mini statements at Bank Windhoek ATMs. Account holders can even use it for shopping without the risks of carrying hard cash.
BWN executive officer for marketing and corporate communication services, Marlize Horn notes: “The solo account will give your child the opportunity to learn what it means to save, conduct transactions at ATMs and on the Point-of-Sale devices and learn about other basic banking terms, such as balances and earning interests.”
In the same spirit, FNB also has the ‘future save account’, which is a transactional account meant for individuals from 0-12 years of age. It encourages young clients to save by offering them competitive interest rates with free cash deposits of up to N$1000 per month.
FNB further has a ‘future forward account’, which is a transmission/savings account aimed at young clients of 13 to 18 years old.
SBN has not yet opened any children’s product but it has availed an option to parents wishing to open an account for their children. Its social media manager, Janet Ndaitwa, says parents can open a PureSave account, which is aimed at providing competitive rates. The account, which is also card-based, allows deposits and withdrawals at any ATMs, two free deposits and withdrawals are offered and the card can also be linked to any existing auto bank card.