Martin Endjala
The Development Bank of Namibia (DBN) has come out strongly to defend its settlement policy in events of default, saying that the bank has robust and well-developed policies that inform credit decisions.
This comes after allegations from members of the public concerning the need for a broader appreciation of the Bank settlement policy in the event of default. As a result, the bank has come out to reassure its clients and the public that it conducts its operations within the approved policy framework and in line with relevant legal instruments.
According to DBN’s Chief Executive Officer, Martin Inkumbi, all DBN clients, regardless of their political or socio-economic standing are subject to similar policies for loan application and collection in the event of default.
Inkumbi reiterated that when an enterprise financed by the Bank is proven insolvent and unable to repay the debt, the Bank initiates measures to recover the loan. Before settlement, the bank deploys measures that preserve the enterprise, which include repayment holidays on the entire debt, interest repayment holidays, extension of the duration of loans, and possible conversion of debt to equity on a case-by-case basis.
This, according to Inkumbi is reassurance that the Bank makes decisions to provide finance based on the apparent sustainability of business plans and cashflow projections, without reference to the occupation or status of the applicant.
“All decisions, including the decision to pursue a settlement, are taken within clearly defined parameters and are subject to scrutiny and ratification by committees,” said the CEO.
Inkumbi emphasized that it is against the Bank‘s policy to discuss client-related matters in public and that the Bank will not be drowned in discussions of confidential client matters.
He however said he encourages the reporting of irregularities and incidents of fraud, corruption, nepotism, theft of intellectual property and or any other misuse of its capital and should there be any suspicion or proof of such abuses, the bank urges the public to report the incident to an outsourced independent investigation.
Meanwhile, the Ministry of Finance in collaboration with the Bank of Namibia drafted the Banking Institutions Bill, which was recently tabled in parliament by the Minister Iipumbu Shiimi to address deficiencies and shortcomings.
This includes clarifying the provisions relating to illegal financial schemes, including the criminalization of Ponzi schemes and the subsequent arrest of their operators.
The Banking Institutions Bill, when promulgated, will enhance the regulatory and supervisory framework for banking institutions and contribute to the maintenance of financial stability.
