27 November 2012

Namibia: Financial Literacy Campaign Launched

The Financial Literacy Initiative (FLI), an initiative aimed at enhancing financial prudence among individuals and micro, small and medium sized enterprises was launched in Katima Mulilo last Tuesday.

The initiative themed "be wise" is a public-private partnership that strives to address the needs associated with financial literacy and consumer protection in a coordinated effort. Speaking at the launch, Caprivi Governor Lawrence Sampofu said the growing financial exclusion among a large percentage of the population is one of the reasons the initiative was launched.

"This national initiative was formed against a background of high financial exclusion among our population. A large section of our population, about 31 percent, still does not have access to the formal financial system. Available information shows that about 90 percent of gross disposable income for households in Namibia is committed to long term and short term debt commitments," said Sampofu. According to Sampofu, the aspirations of a knowledge-based society can only be achieved optimally if financial prudence is cemented.

"Our vision as a nation is to be a knowledge-based competitive economy and a prosperous society, enjoying a better standard of living. We can't achieve these aspirations if our financial wellbeing is not secure and fit and proper. Financial inclusion implies that all adult Namibians shall enjoy unfettered access to the formal financial system, including the banking system, irrespective of income status," he said.

With bank charges becoming increasingly exorbitant and exclusive, Sampofu believes financial service providers have a role to play to lure potential clients. "We are all aware that financial service providers, the banks, insurance companies, medical aid funds, micro lenders and cash loans have a lot to do to achieve a level playing field. Financial products have to be tailored to meet the needs of consumers, especially low-income earners. The cost of such products cannot be allowed to continue serving as a deterrent to broad-based participation in the financial system," Sampofu.

Although disappointed with the low attendance of the launch, Sampofu appealed to residents of the Caprivi Region to heed the message. "I call upon the public and the residents of this great region to assimilate this message and put it to effective use," he appealed.

Katima Mulilo Mayor, John Likando, was also disappointed with the attendance. "I anticipated the hall to be fully packed as messages about the launch were spread through the media. It is disappointing that even councillors are not here. It's a shame. Our region is strategically located and therefore there are a lot of interactions and economic activities taking place. This initiative is aimed at addressing our economic needs, but we will end up addressing only ourselves here. I have personally met a person with 12 life cover policies. This shows that we lack financial literacy. I therefore urge everyone present here to carry the message to others," said Likando.

Also at the launch, statistics were released from the FinScope 2011 consumer survey. The survey, among others, reveals that about 60 percent of people have a difficulty keeping up with financial commitments, while 76 percent have problems making ends meet. Moreover, 66 percent receive their income in cash and only 28 percent receive their income in a bank account. Almost 41percent of people had to go without a cash income in the last 6 months and had to make a plan to make ends meet.

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