277 homes put up for auctioned by banks in 2023

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277 homes put up for auctioned by banks in 2023
277 homes put up for auctioned by banks in 2023

Africa-Press – Namibia. THE Namibian banking sector put up a total of 277 homes for auction due to defaulting customers, out of which only 71 homes were sold, with a total value of N$85.9 million.

As of December 31, 2023, the collective home loan portfolio amounted to N$50 billion, serving a clientele of 68,414 individuals.

This was revealed in a meeting held at Parliament with the Bankers Association of Namibia and the Namibia Competition Commission, which appeared before the Parliamentary Standing Committee on Economics and Public Administration in response to the motion by Hon. Veikko Nekundi: To investigate the overcharges and unethical multiple charges resulting in profiteering commercial banks in Namibia’s perpetual colonial legacy of class and race discrimination against their clients.

During the presentations, committee members conveyed profound apprehension regarding the conventional 20-year repayment duration for home loans, emphasizing the strain it puts on borrowers as it nearly doubles their initial loan amount, thereby increasing the risk of eventual loan defaults.

The committee members further suggested that the repayment durations should be brought down to five years, as the extended repayment of the loans doubles the initial payments. However, the bankers’ association responded that this long period of 20 years is only there to allow customers ample time to repay their loans.

The Bankers Association, in their presentation, further highlighted Namibia’s ranking in terms of banking sector soundness, which fell considerably from 7th in 2009-2010 to 61st in 2019.

The association explained that this is attributable to the increase in country risk as well as the increase in non-performing loans on banks’ balance sheets.

“Namibia’s higher country risk relative to South Africa implies higher funding costs for local banks, which puts pressure on margins. The average spread between the Namibian and South African repo rates since 2010 is 25bps. It is more expensive to do banking in Namibia because of the relatively small economy, small population size, and the high costs of logistics given the large distances and sparse population in various towns and villages. Banks are providers of lending capital and do not take equity risk nor do they receive the high returns associated with equity risk. The role of banks is often misunderstood,” the Bankers Association said.

They further added that there are a total of 216 bank branches and agencies, serving a total of 1.6 million customers countrywide.

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