The Namibia Financial Institutions Supervisory Authority (NAMFISA) has reiterated that no microlender is allowed to confiscate or withhold borrowers' bank cards, PIN codes, or original identification documents.

Bank cards, PIN codes, and original identification documents are prohibited from being kept by those who offer loans through microlending to consumers.

NAMFISA has cautioned that microlenders found guilty of contravening the Microlending Act of 2018 will be liable to penalties, including a jail sentence of not more than five years or being forced to pay a fine not exceeding N$500,00.

NAMFISA Chief Executive Officer, Kenneth Matomola, says the prohibition of bank cards and PIN codes is imposed to protect microlending customers from being exploited by immoral microlenders.

"Any microlender found to be contravening the microlending act is liable to pay penalties calculated at 10% of the annual value of loan disbursements in the immediately preceding financial year. According to Section 3(2) of the Microlending Act of 2018, 'Any person who conducts the business of a microlender without being registered under the Act commits an offence'."

However, Matomola says the practice of lenders holding customers' bank cards, PIN codes, or original identification documents may not automatically suggest the misuse of these, but consumers are exposed to a real risk of unauthorised use of their bank cards and other retained original documents.

"The retention of these documents imposes some critical market abuse, and unscrupulous microlenders can exploit this. Customers of financial services are the most vulnerable members of the financial system. And it is the job of the regulator to ensure that they are treated fairly and protected against this market abuse.

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Hendrina Kanyolo