By: Nghiinomenwa-vali Erastus
In the recently launched Financial Sector Transformation Strategy, the government has promised access to affordable, convenient, and reliable financial services for individuals and micro, small, and medium enterprises (MSMEs).
This falls under the Strategic Pillar – Financial Access – which will focus on access to finance for individuals and MSMEs.
According to the Strategy, the government targets an MSME financing success rate of 70% to address one of the most critical constraints on economic growth and job creation.
Moreover, it promises that 80% of MSMEs that are 10 years and older will be approved for financing, and at least 60% of new MSMEs that are 10 years old and younger will be approved for financing. The strategy also reads that 70% of informal sector businesses and start-ups will have access to financing from formal financial institutions yearly.
According to the consensus reached by the main stakeholders (Bank of Namibia, Namfisa, and the Ministry of Finance) in the report, access to finance for MSMEs remains a problem.
“Financial institutions perceive MSMEs as highly risky, and they often lack appropriate collateral,” the stakeholders revealed.
They added that there is a need to reduce the gaps in access to long-term finance for businesses and entrepreneurs, in particular, considering the different financing options and their inherent risks and requirements.
Financial inclusion is defined as access to and usage of affordable, convenient, and reliable financial services and products by all eligible members of society.
This means that individuals and businesses have access to useful and affordable financial products and services that meet their needs.
The newly-launched Financial Sector Transformation Strategy has five strategic pillars, namely Financial Sector Development for Growth and Sustainability; Financial Access, Literacy and Protection, Digital Transformation and Innovation; Financial Sector Localisation, and Skills and Capacity Development.
The Minister of Finance, Ericah Shafudah, has noted that despite notable progress, too many Namibians remain excluded from formal financial services, particularly in rural areas and among informal sector participants.
Against this backdrop, Namibia must not merely adapt, but lead in creating a financial sector that is resilient, inclusive, and forward-looking.
Therefore, the Strategy prioritises innovative solutions—from mobile banking platforms to agent banking networks—that will bring financial services to every corner of the nation.
“By strengthening domestic financial institutions, developing local capital markets, and building indigenous expertise, Namibia will create a financial sector that truly serves its citizenry’s interests and priorities,” Shafudah noted.
The Namibian financial system comprises a banking sector and a non-bank financial institutions (NBFI) sector.
The banking sector comprises the Bank of Namibia as the central bank, seven commercial banks, three development finance institutions, and a post office savings bank.
The NBFI sector comprises the insurance, pension funds, investments, and microlending industries.
Other players in the financial sector include the development finance institutions, namely the Agricultural Bank of Namibia, the Development Bank of Namibia, and the National Housing Enterprise. erastus@thevillager.com.na
