MPs take aim at loan sharks

OSHAKATI – The National Assembly Standing Committee on Economy and Industry, Public Administration and Planning has raised concerns over mushrooming cash loans, which have pushed many into financial distress.

The lawmakers said some people have been trapped in debt – and in some cases, committed suicide due to high debt levels.

The committee, chaired by former finance minister Iipumbu Shiimi and comprising members including Immanuel Nashinge and Martha Itope, met with members of the public in Oshakati yesterday to discuss the public hearings on the motion, titled ‘Whether the existing laws are truly protecting Namibians from exploitation by lending institutions and informal money lender’.

Shiimi said the aim of the public hearings is to listen to people’s experiences regarding how cash loans are affecting them, as well as to share ideas and find amicable solutions.

Shiimi, who is also the former central bank governor, raised concerns about people committing suicide because of debt from cash loans.

He said people are often left with very little money after deductions for cash loans.

“Youth are the most affected, especially those who have just started working. Some of them are left with only N$1 500 or N$2 000,” he said.

Shiimi stressed that people are genuinely suffering because of cash loans and described the situation as critical and in need of urgent attention.

Also speaking at the public hearing, IPC spokesperson Nashinge said the laws cannot be effectively implemented without input from members of the public because they are the ones affected by the situation.

Nashinge further said the situation is getting out of hand, as people are increasingly reporting cases of suicide because they can no longer cope with their financial circumstances.

He noted that the rising cost of living may be forcing people to take out cash loans to cover expenses they cannot afford with their salaries.

“We also notice issues of young people when they find jobs in towns and are required to pay a deposit for rent. This person will take out a cash loan to pay the rental deposit. At the end of the month, the person will remain with very little money after the cash-loan deduction,” he said.

The councillor of Uuvudhiya constituency, Timoteus Shivute, said young people without qualifications often earn low salaries, which may lead them to approach cash-loan providers because they want to buy furniture and support their families.

“Nowadays, even those with qualifications earn low salaries. Poverty can also cause young people to take out cash loans because they want to support their unemployed siblings,” he added.

Also speaking at the hearing, Abel Mazila, an employee from the Oshana regional council, said the government should implement a policy preventing cash-loan providers from deducting 90% of a person’s salary.

“There are more policies that should be implemented by the ministry of finance to control cash loans in our country. How can you deduct 90% of a person’s salary? It is wrong,” he said.

Mazila said financial literacy awareness programmes should be expanded countrywide.

A resident of Oshana, Thikameni Hipunduka, called on the government to increase public servants’ salaries, saying they earn too little to cope with the rising cost of living.

“Things are expensive. Fuel is getting increasingly expensive. Repo rates are also killing people. It is not easy,” he said.

On the other hand, Hipunduka urged young people not to be influenced by others into taking cash loans.

He said people come from different financial backgrounds.

He added that people should seek financial literacy advice before taking out cash loans.

“Nowadays, you will find a person taking out a cash loan just to pay for a wedding tent or buy expensive clothes. It is wrong. People should seek advice before making such decisions because those decisions have negative consequences for their lives,” he said.

-fhamalwa@nepc.com.na