Condiciones tribológicas

Most responding MFIs (four out of five) have branches widely spread around the country, although most of the branches are in urban areas. Figure 5.1 below depicts the geographical presence of surveyed term-lending institutions around the country. It shows that the northern part of the country as well as the central, western and eastern parts have been very attractive to the responding term-lending MFIs relative to the southern part of the country, i.e. fewer term-lending institutions have a presence in the southern part of the country.93 _This

pattern could be a direct result of the fact that the majority of the population of Namibia lives in those parts of the country, especially the northern parts of the country, where more than 60 per cent of the population resides (NSA, 2012b).

Town-wise, there is a concentration of term-lending institutions around the capital city (i.e. all five responding term lenders have presence in Windhoek), but other towns are also fairly covered, as evidenced by the number indicated next to each town in the map below. The distribution is actually similar to that observed geographically, such that the northern towns of Rundu and Katima Mulilo, Grootfontein and Otjiwarongo as well as Walvis Bay and Swakopmund in the west and Gobabis in the east have the presence of four of the five responding MFIs and are therefore in second place to Windhoek. Towns in the southern part of the country have fewer representation. This pattern also follows the population pattern in that Windhoek is the most populated city in the country, followed by Rundu town in the northern part of the country and Erongo (Walvis Bay and Swakopmund) in the western part of the country. Towns in the southern part of the country are among the least inhabited in the country.

93 _{The northern part of the country is represented by the regions Omusati, Ohangwena, Oshikoto, Oshana, Kavango and}

Caprivi; the central part is represented by the Khomas and Otjozondjupa regions; the western part by the Erongo and Kunene regions, the eastern part by the Omaheke region; while the southern part of the country is represented by the Hardap and

Figure 5.1: Regional presence of surveyed term-lending institutions

Source: Existing map adjusted with researcher information on presence of term lenders94

The numbers of active clients and outstanding loans are also good indicators of outreach. Total active clients reported by the survey respondents (four institutions) amounted to approximately 120 795 in 2013, while the number of outstanding loans for three responding term lenders ranges between the lowest of 7 708 and the highest of 48 524 over the same period, as can be seen in Table 5.2 below.

94 _{New regions have been introduced in Namibia recently, while the names of some old ones have also changed. However, the}

Table 5.2: Outreach of surveyed MFIs (2013)

MFIs

Number of

active

clients

Number of

loans

outstanding

MFI1

23 473

22 585

MFI2

50 000

N/A

MFI3

5 642

7 708

MFI4

N/A

N/A

MFI5

41 680

48 524

Total

120 795

78 817

Source: Survey results; note: N/A stands for “not availed”

The above cited figures are however below the industry reality, as eight term-lending MFIs are in the country, while only four institutions provided their data on the number of active clients and only three provided data on loans outstanding. Therefore the data represent only approximately half of the industry position.

According to NAMFISA, total active clients of the microlending industry was 183 210 at the end of 2011 (which is approximately 8 percent of the Namibian population95_{). These figures}

are relatively comparable to those for MFIs in some countries on the African continent, such as Zambia but are significantly lower than for those in much MFI matured countries such as Kenya. The number of clients served by the consumer payroll MFIs in Zambia (that operate on a similar basis as most of the Namibian microlenders (including some term-lending MFIs) totalled 169 949 (Brouwers et al., 2014). In Kenya, the number of active clients of the credit- only MFIs amounted to 368 740 (AMFI, 2014). Although comparison at this level is generally not ideal, given the differences in population, this comparison gives an idea of how Namibia is faring in this area relative to other countries in Africa, especially as these surveyed institutions are leading in this sector in terms of the value of loans disbursed. Information on the repayment rates has not been provided, but the researcher assumed that these institutions would have high repayment rates, as most of them receive repayments through deduction at source, i.e. deductions are done by employers of clients on salaries.

The survey revealed that this type of MFIs mostly lend to employed and salaried people. Four of them (80%) also indicated that they do not require collateral (see Table 5.3 below),

as the deduction for instalments are done at source through deduction codes96 _{to the payroll.}

It was established that these deduction codes are provided by government, suggesting that the majority of people covered by these institutions are public servants. This in itself is a limitation to outreach, as the unsalaried, self-employed and poor people are not covered, which is not in line with the principle of the microfinance concept. Microfinance is defined as the provision of small-scale financial services to the poor or the poorest among the poor (WSBI, 2009). This definition implies that microfinance has a goal of providing an opportunity to these groups of people to become self-sufficient. All participating institutions also indicated that they offer consumption loans. It can therefore be concluded that credit extended by these types of institutions is meant to complement the monthly income of salaried individuals who already are participants in the financial system in one or the other way and does not necessarily enhance financial inclusion. As such, the current outreach of the term-lending MFIs is also not in line with the aspirations of the country, which aims to enhance financial inclusion.

Table 5.3 below presents some key data and information related to the MFIs’ lending activities. The responding MFIs have managed to play a role in facilitating access to credit to their target segment to the extent represented by the number and value of loans extended depicted in Table 5.3. Accordingly, the number of total loans disbursed by these institutions stood at 121 413, while the average loan amounts fell between a low of N$4 293 and a high of N$20 000. Although this is not a total industry picture, but only a portion of the participating credit-only term-lending MFIs, it gives an indication of the scope of activities and operations of players in the industry, which is considered as a possible candidate for developing the microfinance sector in Namibia. Comparatively, however, these ranges are much lower than those reported for neighbouring South Africa, where microlenders provide varying loan sizes with maximum sizes of between N$7 000 and N$500 000 (Shand & Angove, 2013).

96 _{Deduction codes are a means through which government facilitates preferential deduction of loan instalments for lenders}

through the payroll of government employees. Only a limited number of microlenders have been allocated such codes based on them having met certain requirements by government, such as lending for education purposes.

Table 5.3:Key data and information on credit provision of surveyed MFIs (2013) MFI Number of loans disburs ed Value of loans disburs ed (N$) Loan size range (min- max) N$ Averag e loan amount (N$) Lending method Profile of clients (% female) Operatio n in rural & urban areas (%) Collateral required?

MFI1 22 585 313 mil. 2 000–50 000 20 000 Individual 32.0

67

(urban) No

MFI2 46 000 1.2 bil. 1 000–50 000 16 000 Individual N/A N/A No

MFI3 4 304 25.9 bil. 500–8 000 4 293 Individual 41.73 N/A Yes

MFI4 N/A 107 mil. N/A 6 509 Individual N/A N/A No

MFI5 48 524 517 mil. 2 599–21 599 12 099 Individual N/A N/A No

Total 121 413

Source: Survey results; note: N/A stands for “not availed”

Whether or not the term-lending microfinance industry has made an impact, which a microfinance industry would normally be expected to make (i.e. poverty reduction), needs to be judged based on their target market, which is employed people, mostly government employees that are based in urban areas. Based on that, the researcher argues that term- lending microlenders are not contributing to poverty reduction in Namibia. The fact that they do not lend to small businesses also renders their contribution to the development efforts of the country questionable.