By: Danny Meyer
Is a supportive banker a contradiction in terms?
Many entrepreneurs who have applied for business loans and other forms of funding support have often claimed this at consultative meetings and during mentorship sessions.
An anecdote narrated by participants at gatherings is that bankers are eager to provide an umbrella for protection during stormy times, but when it rains, they hurriedly snatch back that umbrella, leaving borrowers to fend for themselves.
Another anecdote refers to a banker inviting a prospective borrower to lunch as a strategy to close a deal, but that same banker becomes elusive when the borrower hits a snag and seeks a loan extension.
A contradiction in terms is a mixture of words that make no sense, as some words used suggest the opposite meaning of others.
Examples to illustrate a contradiction are an anarchist march, creating a subtle thriller, sustainable concrete, a convincing victory and, the much favoured one, an honest politician.
One is reminded of the sage wisdom of American economist, Edwin Francis Gay, who in 1908 became the first dean of Harvard Business School, a position he held until 1919.
Gay said the purpose of business is not merely to focus on maximising profit generation at all costs, but to make a decent profit, decently.
President Nangolo Mbumba and some cabinet ministers’ recent meeting with the heads of commercial and state-owned banks was extensively covered in the media.
According to press reports, concerns expressed by the government at the discussions with the bankers included high interest rates and service fees.
Although acknowledging their supportive role over past years, government has reportedly challenged banks to be a development partner by aligning their operational strategies with Namibia’s socio-economic development objectives.
That meeting came at a time when the country’s central bank, the Bank of Namibia, is conducting a study on fees and charges in the financial sector.
The nation waits with bated breath for the findings of that survey.
Also recently reported, was the red flag by the Namibia Competition Commission of a possible collusion between nine commercial banks and the Payments Association of Namibia in price-fixing, another scary allegation with the facts highly anticipated.
State-owned banks have a clear mandate, and ownership is vested in the nation.
In turn, commercial banks have shareholders and most operating in Namibia have significant and even controlling foreign shareholding.
Shareholders, including investors in commercial banks, want a return on their investments in the form of a dividend.
There is nothing wrong with a bank making a profit of which a portion will be allocated to the firm’s owners, being their reward, but banks do have a developmental role in an economy.
Have commercial banks had it too good for too long, to the extent they find it unnecessary to adapt to changing times and needs?
There is a bank that shook the financial services landscape in South Africa by discarding traditional banking hours, operating on weekends and focusing on project-based rather than collateral-based lending.
Acknowledged for its innovative approach to banking, which challenged traditional banking models and offered more accessible, affordable, and simple banking solutions, that bank now holds 20 % of the market.
The time has come for a disruptor to enter Namibia’s banking sector.
Danny Meyer, Director of SME Compete. The views expressed herein are his own.
