Only 10% of Namibians have more than N$50 000 in their bank accounts.
To strengthen protection for most savers, the Namibia Deposit Guarantee Scheme (NDGS) has raised depositor insurance coverage from N$25 000 to N$50 000 effective until 2027.
This was done to boost confidence in the banking system and protect the majority of depositors.
During the launch of the NDGS' latest annual report last week, scheme head Florette Nakusera said it exists to protect depositors against losing their money in the unlikely event of a commercial bank failure.
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"The scheme adopts a guaranteed coverage limit of N$50 000 per depositor per member institution.
At this coverage limit, the scheme covers more than 90% of current depositors," she said.
Most Namibians' bank balances fall below this threshold.
The insurance is funded through annual premiums paid by all Namibian banking institutions, including branches of foreign banks and building societies that operate in Namibia.
Nakusera said the scheme's coverage also helps prevent panic withdrawals by reassuring depositors their money is safe even if a bank fails.
This is an important buffer that lowers the risk of a broader financial crisis.
According to the most recent figures from the Namibia Deposit Guarantee Authority's 2024 Annual Report, the scheme covers almost two million depositors.
About 1.8 million (91.3%) were fully covered at the previous limit of N$25 000.
Meanwhile 167 000 (8.7%) were partially covered because their balances exceeded the insured amount but could still recover up to the limit.
This includes a mix of individuals and businesses.
The total value of qualifying deposits in the banking sector was estimated at approximately N$75 billion at the end of 2024.
Since the scheme's inception in 2020, its coverage and fund size have steadily grown.
In 2022, the guarantee fund stood at about N$16.2 million, fully covering over 90% of depositors under the N$25 000 limit.
By the end of 2023, it had expanded to N$23.1 million and by 2024, the fund reached about N$30.3 million.
