Helping to build a financial future
How microfinance credit providers can help
Microfinance credit providers are crucial in shaping Namibia's financial landscape. In today's challenging yet opportunity-filled economic environment, the Namibian financial ecosystem must focus on fostering partnerships and collaboration, especially among microfinance credit providers.These organisations play a vital role in enhancing financial inclusion and empowering individuals to build their financial future. As a global information and insights company, TransUnion collaborates with lenders and regulators worldwide to increase financial inclusion, benefiting individuals and families and driving economic growth.
Namibia's recent census reveals a population surge to 3.02 million, of which 71% are under the age of 35. This demographic presents a unique opportunity for microfinance providers to expand financial access to a younger generation eager to participate in the economy but often lacking the means.
TransUnion estimates 1.66 million adults are eligible for credit, yet less than 674 000 are currently credit-active. This highlights the need to widen financial inclusion, especially for young adults.
The benefits of an enabling environment
Financial inclusion for young adults goes beyond access to credit; it includes providing tools to help them take ownership of their financial health and well-being. Microfinance credit providers are often the first point of contact for individuals without access to traditional banking services.
They offer a lifeline, enabling people to improve their livelihoods and contribute to the broader economy. According to the Namibia Financial Institutions Supervisory Authority (NAMFISA), 674 registered microfinance credit providers serve over 180 078 clients annually. These micro-loans uplift families, support entrepreneurship, and stimulate economic growth.
The microfinance sector must offer responsible, sustainable financial solutions aligned with borrowers' long-term well-being. The Microlending Act has been instrumental in regulating the industry, ensuring lenders and borrowers operate within a fair and accountable framework. This legislation underscores the importance of microfinance providers in Namibia's financial ecosystem.
Partnership platform
However, regulation alone is not enough. To fully harness the potential of the micro-lending sector, strong partnerships are needed between microfinance providers and stakeholders like NAMFISA. Collaborations ensure that lending practices are responsible, transparent, and sustainable. Working with companies like TransUnion can provide microfinance providers with tools to assess creditworthiness accurately, reducing default rates and fostering innovative financial solutions.
Microfinance providers in Namibia serve a dual role: promoting financial inclusion and ensuring responsible lending. By providing access to credit and adhering to a regulated framework, they ensure sustainable economic participation. The microfinance sector goes beyond financial services; it builds a framework for increasing economically active Namibians. Working together, sharing insights, and encouraging responsible lending can unlock the full potential of this sector, benefiting both individual borrowers and the entire Namibian economy.
* Lara Enslin, CEO of TransUnion Namibia.
** Opinion pieces and letters by the public do not necessarily reflect the opinion of the editorial team. The editors reserve the right to abridge original texts. All newspapers of Namibia Media Holdings adhere to the Code of Ethics for Namibian Media, a code established jointly with the Media Ombudsman.