Although in the early years of independence, the country adopted the affirmative action policy aimed at improving the participation of previously disadvantaged in the market, 24 years on Namibians are still struggling to enter the banking sector own banks writes Timoteus Shihepo.
In the past 24 years Namibians have struggled to form consortiums and own banks like in other Southern African Development countries. South Africa, Zimbabwe and Zambia has a banking sector that is dominated by locals although multinational institutions are also visible in the industry.
To date the only locally owned commercial banks are Bank Windhoek which has the largest shareholding from the previously disadvantaged majority after listing at the Namibian Stock Exchange since last year and recently registered E-Bank. The other banks that are locally owned are Developmental Finance Institutions including the SME Bank which is a public private partnership, Agribank and Development Bank of Namibia which are wholly owned by the Government.
Chairman of the Bankers Association of Namibia (BAN), Ian Leyenaar, said one of the challenges that Namibian are facing when it comes to the ownership of Banks is the 2008 financial crisis.
“There are many challenges as to why Namibians don’t own banks with the most recent one being the 2008 crisis. After this crisis additional regulation by authorities such as Namibia Financial Institutions Supervisory Authority (Namfisa) and Bank of Namibia has triggered all banks to be cautious on how they operate. Owning banks was always going to be difficult after the crisis,” he said.
A legislation of 45% ownership of banks by Namibians has been passed and Leynaar who is also the CEO of FNB Namibia Group said as long as the playing field is level they will comply.
“Some years ago we localised FNB up to 42%. We have always supported legislations as long as it’s fair. All we ask is a level field. Now we see upcoming banks such as Fides, the Small and Medium Enterprises (SME bank) as well as the recent E-Bank, we have no problem with competition and we fully support the legislation,” said Leynaar.
Namibian Chamber of Commerce Industry (NCCI) President, Martha Tilahun-Namundjembo said the challenge for locals owning banking has been the steep capital requirements needed to establish a financial institution.
“Many Namibians lack access to funds. The only way to have broad indigenous participation in this industry is when there is means but currently the means are not really available,” Tilahun-Namundjembo said.
Tilahun-Namundjembo also said Government has done equally well to create legislation that allows for partnerships.
, “The Government created a preferential statue where previously disadvantages could participate by ways of partnerships with any international financial institution,” Tilahun-Namundjembo said.
She added that, “She fully supports the legislation and said that if the same can be applied to other sectors.”
Meanwhile outgoing Chief Executive Officer of Standard Bank Namibia Mpumzi Pupumi revealed at his farewell gala dinner last week that SBN is targeting to transfer 25% to locals.
“I do not know how it is going to be done whether by hook or crook but we are targeting to get atleast 25% of the bank locally owned by Namibians by 2019,” Pupuma said. Pupuma has also been instrumental in the transferring of 10 percent of the SBN to locals and in the past few years. His sentiments were also uttered by one of the bank’s long serving Board Members Jerry Mudinohamba who revealed that since 2007 the bank has managed to turn around the banks directorship from a 90% foreign representation to the current situation where 90% of the directors are local.
“I believe we have done enough to improve our local people with the appointment of a young man Junias Mungunda as the Chief Executive Officer. We need to understand that if we do not create the opportunity for our local people no one will,” Mudinohamba said.