By: Annakleta Haikera
Mashare Constituency Councillor, Peter Kashumali has warned that the growing debt burden is trapping households in a cycle of borrowing, refinancing and taking new loans to settle existing debts.
“You go to location A, you take. You go to location B, you take. You go to location C, you take,” Kashumali said.
The remarks were made during public hearings by the National Assembly Standing Committee on Economy, Industry, Public Administration and Planning in Kavango East on Wednesday.
He said some borrowers eventually reach Location D and beyond, taking additional loans to pay interest on previous debts.
Kashumali said the situation is worsened by rising living costs, low incomes and the ease with which people can access loans, particularly from lenders who do not properly assess affordability.
He rejected the view that salary increases alone would solve the problem, saying people also need to be taught how to manage their income.
“Money can never be enough,” he said, calling for financial education to start at an early age.
The committee is investigating whether existing laws adequately protect households and borrowers from exploitation by formal lenders and informal money lenders.
Committee chairperson Iipumbu Shiimi warned that excessive borrowing is placing households and civil servants under severe financial pressure.
He said some people are left with very little income after servicing multiple debts, making it difficult to meet basic household needs.
Shiimi acknowledged that the rising cost of living is pushing some families into debt but warned that excessive borrowing is not a sustainable solution.
He called for stronger financial education and public awareness to help people make informed borrowing decisions.
The hearings have also brought attention to the human cost of severe financial distress, including concerns about mental-health struggles and suicide as debt pressures intensify.
Committee member Immanuel Nashinge called for stronger cooperation between HR officials, banks, the Bank of Namibia, police and financial intelligence authorities to address unregistered money lenders.
Nashinge questioned what HR officials should do when employees’ salary deductions become excessive, arguing that employee welfare must also be taken into account.
He also urged banks to monitor suspicious accounts, particularly those repeatedly receiving and disbursing money shortly after payday.
Nashinge stressed that borrowing is not a crime but said stronger regulation is necessary to protect borrowers.
“It’s a responsibility for all of us,” he said.
Shiimi further called for stronger enforcement of existing laws by regulators, including NAMFISA, to protect borrowers from excessive interest charges and exploitation.
Millicent Ndopu from Cashnet Finance also shared her views on compliance with lending laws and regulations when providing loans to borrowers.
Ndopu said the company advises clients before they take out loans. She added that clients are informed that a 30% charge is added to the amount they borrow.
The committee will compile evidence gathered during the public hearings and make recommendations to the National Assembly and relevant institutions.
The committee’s concerns come amid growing evidence of the scale of Namibia’s debt problem.
NAMFISA reported that household debt stood at about N$78 billion at the end of 2025, with the microlending sector accounting for approximately N$7.5 billion.
Recent parliamentary discussions have also revealed that some civil servants can be left with as little as N$500 in take-home pay after deductions, raising questions about whether existing safeguards are sufficiently protecting workers.
NAMFISA has previously identified the payroll deduction system, limited financial literacy and economic pressures as factors contributing to rising indebtedness.
DEBT AND SUICIDE CONCERNS
The financial crisis has also raised concerns about the psychological consequences of excessive debt.
While the committee has not established that debt directly causes every suicide, financial distress has been linked to serious mental-health struggles in Namibia.
In 2025, reports emerged of teachers taking their own lives amid financial difficulties, while Prime Minister Elijah Ngurare publicly disclosed that severe financial stress had once driven him to contemplate suicide.
The issue therefore extends beyond loans and salary deductions, with lawmakers and stakeholders increasingly confronting the human cost of financial distress.
PRESSURE TO ACT
The government already has legislation designed to regulate microlending.
The Microlending Act of 2018 requires microlenders to register with NAMFISA and prohibits lenders from granting loans without an affordability assessment that takes a borrower’s existing obligations into account.
The law also prohibits certain abusive collection practices and excessive finance charges, while allowing NAMFISA to take enforcement action against non-compliant lenders.
However, the parliamentary hearings are now questioning whether the existing framework is strong enough and whether it is being properly enforced.
