Banks adding salt to wounds

14 May 2020 | Banking

Unless a win-win situation is created, the limping economy won’t recover.
So says the Namibia Chamber of Commerce and Industry (NCCI) chief executive Charity Mwiya.
He says concerns from members of the public were received about “some banks adding salt to injuries by adding administrative charges, treating a payment holiday as a new loan or credit facility, and in doing so expecting borrowers to incur new debt to service old debt”.
In a statement by the NCCI following a virtual meeting held with the Bank of Namibia (BoN), the Chamber said that another concern raised relates to banks making promises of support to businesses, but then not delivering.
During the meeting, Mwiya briefed the BoN on the NCCI’s role in the private sector Covid-19 Task Team of the Ministry of Industrialisation and Trade and the City of Windhoek. This includes mobilizing private sector support for government programmes and interventions, as well as advocating for and submitting proposals to government on possible intervention measures to support businesses impacted by the pandemic.
The BoN said that its’ Determination No. BID-33 policy changes help relax regulatory requirements, to provide relief to banking institutions when dealing with impaired loans and to continue lending to the real economy, thereby stimulating economic growth.
However, the NCCI pointed out that some banks now classify clients who were in good standing pre-Covid, as risks unworthy of support since the implementation of lockdown measures.
The BoN undertook to look into the matter and to assess if banks are indeed adopting a burden sharing stance as was hoped for, so that clients aren’t worse off if they opted for loan holidays.
According to the statement, the NCCI and BoN will meet again after the Central Bank has engaged with commercial banks.
In the meantime, the NCCI invites businesses across the country, irrespective if they are members of the chamber or not, to come forward with concerns encountered with banks.