{"id":959,"date":"2017-03-27T15:29:54","date_gmt":"2017-03-27T13:29:54","guid":{"rendered":"https:\/\/www.namfisa.com.na\/educates\/?p=959"},"modified":"2025-07-19T22:51:07","modified_gmt":"2025-07-19T20:51:07","slug":"micro-lending-operation","status":"publish","type":"post","link":"https:\/\/www.namfisa.com.na\/educates\/micro-lending-operation\/","title":{"rendered":"Micro-Lending Operation"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"959\" class=\"elementor elementor-959\">\n\t\t\t\t<div class=\"elementor-element elementor-element-99b4585 e-flex e-con-boxed e-con e-parent\" data-id=\"99b4585\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a8a1293 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"a8a1293\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h3 class=\"section-title\">Understanding Micro-Lending: Your Rights and Cost Breakdown<\/h3><span class=\"title-separator separator-border theme-color-bg\"><\/span><\/div><!-- .title-wrap --><div class=\"section-description\"><h4>Definition of Money Lender and Micro-lender<\/h4>\nIn terms of the Usury Act, 1968 (Act No. 73 of 1968), a money lender is defined as any person who is granting or has granted a loan or a sum of money to a prospective borrower in terms of a money lending transaction. The Minister issued Exemption Notice No. 189 of 25 August 2004 under section 15A of the Usury Act, 1968 defining a micro-lender as a person registered with the Registrar and whose business includes the carrying on of micro loan transactions.<br><br>\n\nA micro loan transaction is defined as a money lending transaction in respect of which the loan amount:<br><br>\n\na. Does not exceed N$50 000;<br>\nb. Together with the finance charges which is owing by the borrower must be paid to the micro-lender, whether in instalments or otherwise, within a period of 60 months after the date on which the sum of money has been advanced to the borrower; and<br>\nc. Is not paid in terms of a credit card scheme or withdrawn from a cheque account with a bank so as to leave that cheque account with a debit balance.<br><br>\n\nMoney lenders, except micro-lenders, are not obliged to register with NAM-FISA. In terms of Exemption Notice No. 196 of 25 August 2004, money lenders are only allowed to charge maximum annual finance charges at an average prime rate times 1.6. It is currently 9.75* percent times 1.6 equaling 15.60 percent per annum. In addition, money lenders have the obligation to pay a levy to NAMFISA amounting to 1% of the loans disbursement.<br><br>\n\n(*9.75 percent as at 31 May 2012)<br><br>\n\n<h4>Example Calculations<\/h4> <style> .calc-box { background-color: #6D773F; color: white; padding: 10px; margin-bottom: 20px; font-family: monospace; border-radius: 5px; } .calc-title { color: #B9A259; font-weight: bold; margin-bottom: 8px; } <\/style> <div class=\"calc-box\"> <div class=\"calc-title\">30 Day Loan (N$1,000)<\/div> Annual finance charge = (Loan amount x (average prime rate x 1.6)) \u00f7 12<br> = (N$1,000 x (9.75% x 1.6)) \u00f7 12<br> = (N$1,000 x 15.6%) \u00f7 12<br> = N$156 \u00f7 12<br> = <strong>N$13<\/strong><br><br> Total amount payable = Loan amount + annual finance charge<br> = N$1,000 + N$13 = <strong>N$1,013<\/strong> <\/div> <div class=\"calc-box\"> <div class=\"calc-title\">6 Months Loan (N$1,000)<\/div> Annual finance charge = Loan amount x (average prime rate x 1.6) x (6 \u00f7 12)<br> = N$1,000 x (9.75% x 1.6 x 0.5)<br> = N$1,000 x 15.6% x 0.5<br> = N$156 x 0.5<br> = <strong>N$78<\/strong><br><br> Total amount payable = Loan amount + annual finance charge<br> = N$1,000 + N$78 = <strong>N$1,078<\/strong> <\/div> <div class=\"calc-box\"> <div class=\"calc-title\">12 Months Loan (N$1,000)<\/div> Annual finance charge = Loan amount x (average prime rate x 1.6)<br> = N$1,000 x (9.75% x 1.6)<br> = N$1,000 x 15.6%<br> = <strong>N$156<\/strong><br><br> Total amount payable = Loan amount + annual finance charge<br> = N$1,000 + N$156 = <strong>N$1,156<\/strong> <\/div> <blockquote>Money lenders are also not allowed to keep the Bank Cards and PIN of borrowers<\/blockquote><br>\nWhere borrowers find that money lenders charge in excess of the maximum allowable finance charge rate, they should report this anomaly immediately to NAMFISA.<br><br>\n\nMoney lenders are also not allowed to keep the Bank Cards and PIN of borrowers<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2eac552 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"2eac552\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h3 class=\"section-title\">Summary<\/h3><span class=\"title-separator separator-border theme-color-bg\"><\/span><\/div><!-- .title-wrap --><div class=\"section-description\"><\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3ba7d0d elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"3ba7d0d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h3 class=\"section-title\">Understanding Money Lending and Micro-Lending in Namibia<\/h3><span class=\"title-separator separator-border theme-color-bg\"><\/span><\/div><!-- .title-wrap --><div class=\"section-description\">In terms of the Usury Act, 1968 (Act No. 73 of 1968), a money lender is defined as any person who grants a loan to a borrower in a money lending transaction. To regulate this industry and protect consumers, the Minister of Finance issued Exemption Notice No. 189 of 25 August 2004, under section 15A of the Usury Act. This notice formally recognizes a micro-lender as a person registered with the Registrar (NAMFISA) and whose business involves micro loan transactions.\n<br><br>\n\nA micro loan transaction is a lending agreement that meets the following criteria:\n<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b2aaf77 elementor-widget elementor-widget-egovenziconlist\" data-id=\"b2aaf77\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenziconlist.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"icon-list-wrapper\"><ul class=\"nav flex-column vertical-icon-list\"><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>The loan amount does not exceed N$50,000;<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>The loan, including all finance charges, must be repaid within 60 months (five years) of the date the funds were advanced;<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>The loan cannot be accessed via a credit card or result in a debit balance on a cheque account.<\/li><\/ul><\/div><!-- .icon-list-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c6a395e elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"c6a395e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\">Registration and Regulation<\/h5><\/div><!-- .title-wrap --><div class=\"section-description\"><\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c23f92e elementor-widget elementor-widget-egovenziconlist\" data-id=\"c23f92e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenziconlist.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"icon-list-wrapper\"><ul class=\"nav flex-column vertical-icon-list\"><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Only micro-lenders are required to register with NAMFISA.<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Money lenders, other than micro-lenders, are not obligated to register.<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>All money lenders must comply with interest limits and report to NAMFISA where applicable.<\/li><\/ul><\/div><!-- .icon-list-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4a167a4 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"4a167a4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\">Finance Charges and Interest Limits<\/h5><\/div><!-- .title-wrap --><div class=\"section-description\">According to Exemption Notice No. 196 of 25 August 2004, the maximum annual finance charge that a money lender may impose is:\n\nAverage prime rate x 1.6\n\nAs at 31 May 2012, the prime rate was 9.75%, resulting in a maximum finance charge of 15.60% per annum.\n\nLenders are also required to pay a levy of 1% of their total loans disbursed to NAMFISA.<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f9d450e elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"f9d450e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\">Loan Examples<\/h5><\/div><!-- .title-wrap --><div class=\"section-description\"><strong>1. 30-Day Loan (N$1,000)<\/strong><br>\n\nAnnual Finance Charge = (N$1,000 \u00d7 15.6%) \u00f7 12 = N$13\n\nTotal Repayment = N$1,000 + N$13 = N$1,013<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-53cd309 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"53cd309\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\"><\/h5><\/div><!-- .title-wrap --><div class=\"section-description\"><strong>2. 6-Month Loan (N$1,000)<\/strong><br>\n\nAnnual Finance Charge = N$1,000 \u00d7 15.6% \u00d7 (6 \u00f7 12) = N$78\n\nTotal Repayment = N$1,000 + N$78 = N$1,078<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b52be04 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"b52be04\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\"><\/h5><\/div><!-- .title-wrap --><div class=\"section-description\"><strong>3. 12-Month Loan (N$1,000)<\/strong><br>\n\nAnnual Finance Charge = N$1,000 \u00d7 15.6% = N$156\n\nTotal Repayment = N$1,000 + N$156 = N$1,156<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-c8310f8 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"c8310f8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\">Important Consumer Protections<\/h5><\/div><!-- .title-wrap --><div class=\"section-description\"><\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-b8e5699 elementor-widget elementor-widget-egovenziconlist\" data-id=\"b8e5699\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenziconlist.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"icon-list-wrapper\"><ul class=\"nav flex-column vertical-icon-list\"><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Money lenders are prohibited from keeping borrowers\u2019 bank cards and PINs. <\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Excessive Charges Must Be Reported.<\/li><\/ul><\/div><!-- .icon-list-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ba44985 elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"ba44985\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\">Consumer Reminder<\/h5><\/div><!-- .title-wrap --><div class=\"section-description\">Before accepting a loan:<\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9bc106d elementor-widget elementor-widget-egovenziconlist\" data-id=\"9bc106d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenziconlist.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"icon-list-wrapper\"><ul class=\"nav flex-column vertical-icon-list\"><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Ensure you understand the full cost of borrowing.<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Compare lenders\u2019 terms and charges.<\/li><li class=\"icon-parent\"><span class=\" icon-theme-color ti-minus\"><\/span>Never hand over your bank card or PIN to a money lender.<\/li><\/ul><\/div><!-- .icon-list-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d6dc01a elementor-widget elementor-widget-egovenzsectiontitle\" data-id=\"d6dc01a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"egovenzsectiontitle.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"section-title-wrapper border-light text-left\"><div class=\"title-wrap\"><h5 class=\"section-title\"><\/h5><\/div><!-- .title-wrap --><div class=\"section-description\">For more information or to report an issue, contact NAMFISA directly <\/div><!-- .section-description --><\/div><!-- .section-title-wrapper -->\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Understanding Micro-Lending: Your Rights and Cost Breakdown Definition of Money Lender and Micro-lender In terms of the Usury Act, 1968 (Act No. 73 of 1968), a money lender is defined<\/p>\n","protected":false},"author":1,"featured_media":960,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"footnotes":""},"categories":[430],"tags":[],"class_list":["post-959","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-micro-lending-credit-agreement"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/959","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/comments?post=959"}],"version-history":[{"count":7,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/959\/revisions"}],"predecessor-version":[{"id":35798,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/posts\/959\/revisions\/35798"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media\/960"}],"wp:attachment":[{"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/media?parent=959"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/categories?post=959"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.namfisa.com.na\/educates\/wp-json\/wp\/v2\/tags?post=959"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}