Cash loan businesses in Namibia booming at the moment. The rising cost of living has meant people are more reliant on debt i.e. cash loans and other loan facilities from financial institutions. This means starting a cash loan business in Namibia could ensure an endless supply of willing customers eager to borrow money. Cash loan business may be one of the many ways to achieving financial freedom.
Click here to read our article on the secrets of achieving personal financial freedom.
How do you register a cash loan in Namibia though? What are somethings as a person you should know about, this article will explore just that!
How to register a Cash Loan
Cash loan businesses are legally referred to as microlenders. Microlenders in Namibia are regulated by the Microlending Act, No. 7 of 2018 (the “Act”) and the Namibia Financial Institutions Supervisory Authority which is also known as “NAMFISA”.
You can read more on the “Act” here.
The Namibia Financial Institutions Supervisory Authority (“NAMFISA”) regulates all microlending activities in Namibia and any person who intends to open and run the said businesses is required to apply to NAMFISA via its Electronic Reporting System (“ERS) for a license.
An application form, signed by the applicant and principal officer of the cash loan, can be found on Schedule 1 to the Standards under the Microlending Act, 2018 and must be submitted via the ERS. Such application must be accompanied by the following:
- Applicant tax certificate;
- Auditor/accountant appointment letter;
- Certificate of conduct of all natural persons involved in the cash loan’s operations;
- Certified copies of identification documents all natural persons involved in the cash loan’s operations;
- CV of principal officer and copies of qualifications including testimonials;
- Bank confirmation letter;
- Copy of the loan agreement to be used by the cash loan;
- Copy of memorandum of incorporation;
- Proof of source of funds;
- Copy of proof of payment of application fee of N$2000; and
- Proof of compliance with the Financial Intelligence Act, 2012 (Act No. 13 of 2012).
How Cash Loan Business Operate in Namibia
Once the business is successfully registered there must be a principal officer appointed at any given time. This is a requirement when applying for registration in any event.
The business is then required to submit, to NAMFISA periodical and other returns as per section 16 of the Act. It is also worth noting that section 20 of the Act states that, a cash loan must get approval to operate any other business on same premises.
However to open additional branches of the business, lets say a new branch in Windhoek west, approval from NAMFISA is needed.
A cash loan business may not, in connection with any microlending transaction stipulate for, demand or receive finance charges at a rate greater than the percentage determined by the Registrar in terms of the Usury Act.
Insights about Cash Loan businesses in Namibia.
Any Cash Loan business in Namibia is not allowed to lend more than N$ 100 000.00 to any borrower. In addition for any amounted borrowed, the amount borrowed must be paid off together with the finance charges within a period of 60 months (5 years).
Cash Loan businesses are not allowed to:
Keep or make use of any bank cards or personal information such as pin codes or original identification documents, original passports or original driving licenses of the borrower.
Make use of any collection method not authorized by law, including –
- Attachment of the property of the borrower without a court order;
- Threats of physical or other harm; and
- Using payment methods in violation of the Payment System Management
The above sums up everything you need to know as an ordinary Namibia who wishes to start and operate a cash loan business in Namibia.
Kindly note that other provisions of the Act and the Standards may apply during the day to day operation of the cash loan business.
This article does not constitute legal and/or financial advice. Kindly consult a registered financial or legal professional for appropriate advice on the subject matter.
