Majority ‘Don’t Know Financial Status’

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By Petronella Sibeene WINDHOEK At least 70 per-cent of working Namibians lack knowledge of their financial situation, a managing member of Ja-Lo Financial Consulting has revealed. Lloyd Underhill told New Era this week that based on a study that was recently conducted by his organization, 70 percent of working Namibians who earn at least N$6 000 and above did not know their financial position. In light of that, Ja-Lo Financial Consulting was inaugurated last week in an effort to provide primary financial education to Namibians. Most Namibians are said to lack negotiation powers, which has mainly led to them missing out on some benefits that banks offer. “People lack knowledge and they do not bargain with banks. They lack negotiation skills. They do not know what corrective measures are there to assist them to qualify for certain bank products”, he said. Underhill says there is a great need for this financial concept as most people have ended up trapped in the cycle of micro-lending due to poor financial planning. Other than that, people purchase products they do not necessarily need and many have ended up credit unworthy which has a bad influence on the economy of any given country. “Some people go for certain insurances that are not necessary. The disadvantage of people not having the knowledge goes far and usually results in most needs remaining unattended to.,” he added. Deputy Minister of Finance Tjekero Tweya indicated during the launch of Ja-Lo Financial Consulting that the financial industry plays a major role in the development of a country and as such there is a need to rally together and invest in innovative ideas that can contribute to broad-based economic development. “The Government has ensured and will continue to ensure an attractive and conducive business environment for our people; it is now up to the industry players that have slowly responded to the government’s call to invest locally,” said the deputy minister. He added that there are significant challenges that must not be overlooked and one of them is limitation of capital outflow. Tweya proposed a need to have standards that will govern the finance industry, adding that if stringent investment regulations were in place, public funds would not be misused. Deputy Registrar of Provident Institutions Marcelina !Gaoses explained that Namibia’s financial system is well regulated. Even if banks traditionally provide only depository and lending facilities, consumers should take the responsibility for their financial future and take decisions to acquire information. “The public should realize that they have the right to obtain certain important information from any financial institution or intermediary,” she advised. The need to empower Namibians to make sound financial decisions and take charge of their financial future will not only result in contributions towards capacity building through skill transfer but also positively contribute towards the growth of Namibia’s financial service industry. Of late, two issues have become topical in the Namibia society. One pertains to the high bank charges on which the Parliamentary Committee on Economics recently held public hearings. The other one involves a need for a national consumer protection and education programme. According to !Gaoses, consumer education is one of the Namibia Financial Institutions Supervisory Authority (NAMFISA)’s strategic imperatives and the development and implementation of this programme is at an advanced stage.