The informal market has grown rapidly in Namibia’s northern regions as people who became unemployed due to COVID-19 or who could not find employment, had to move back to rural areas. This is according to First National Bank (FNB) Market Research Manager Frans Uusiku, who in a media statement on Monday said the inherent lack of tenure security that has traditionally served as a barrier for households to access financial services, might have also contributed to these informal market dynamics. “As we ponder on how best to capitalise on some of these emerging opportunities in the informal market, the following two strategy questions could serve as a starting point towards this conversation. First, how can we adapt some features of informal financial institutions to improve our ability to service informal operators and ultra-low-income households? Second, how can we forge strategic linkages with informal financial institutions to deepen our participation in the informal market ecosystem? This is particularly true for the deep rural areas where proximity to towns remains a stumbling block towards achieving financial inclusion,” Uusiku said. He added that interestingly, a review of the informal market in Namibia showed that a greater proportion of informal traders in the far northern areas are trading in general enterprises such as fresh vegetables, poultry and meat, whereas the central and coastal regions are mainly dominated by the industrial market such as auto mechanic, welding and upholstery activity. From an informal market perspective, the northern regions serve as an important jurisdiction for market penetration due to comparative advantage in the production and processing of fast-moving consumer goods along the agriculture value chain, Uusiku said. He noted that this implies that there is a relatively high degree of money circulation in the northern economy, especially during the wedding and festive seasons. “The region also offers an immense value chain financing opportunity due to a broader market exposure - locally and by extension, neighbouring Angola and Zambia. Therefore, to overcome the current concentration risk and find alternative revenue streams, a value-chain approach is recommended. Credit and lending solutions can be provided to backward linkages and transact and invest solutions can be provided to forward linkages,” Uusiku added. -NAMPA