Country Financial Sector Profilesback

Financial Sector Overview

Economic Context

Namibia is a middle-income developing country and is one of Africa’s most successful economic stories. This former South African colony, which gained independence in 1990, enjoys a sound macroeconomic performance and great socio-political stability. The average GDP economic growth was 4.2% between 2010 and 2017, higher than for sub-Saharan Africa (3.87%). The economy is mainly based on mineral resource exploitation (diamonds, copper, uranium, manganese, and zinc), representing about 10% of GDP and more than 50% of exports. Namibia is one of the world's least densely populated countries (2.5 inhabitants/km2), with a population of 2.5 million living in a territory similar in size to Nigeria. Its five-year national development plan (2017-2022) focuses on economic transformation programmes, and it allocates about 42% of GDP to infrastructure investments through public and private financing. The World Bank’s Doing Business report ranked Namibia 107th out of 190 countries in 2018 (106th in 2017) against 69th in 2010, i.e. a drop of 38 spots. The country’s business environment has indeed deteriorated due specifically to the increase in the period for enforcing contracts from 270 days in 2010 to 460 days in 2018. According to the World Economic Forum's global competitiveness rating, Namibia ranked 100th in 2017 out of 140 economies, compared to 74th in 2010, i.e. a drop of 26 spots. The country has a financial sector strategy (2011-2021) that aims to build a more resilient, competitive and dynamic financial system.

Financial Sector Overview

Namibia’s financial and banking sector is relatively well developed and sophisticated. It is dominated by non-banking institutions with assets worth a nominal value of NAD 287.55 billion in 2017 (USD 20.17 billion), i.e. 159.2% of GDP. Pension fund and insurance company assets account for 84.7% and 33.3% of GDP, respectively. The non-banking financial sector is comprised of 32 insurance companies (life and non-life), 138 pension funds, 317 microlenders, 9 medical aid funds, 16 mutual funds and 26 investment management companies.

Namibia had 7 banks with 163 branches in 2017. Bank lending represented 50.7% of GDP in the same year, a performance well above the average for sub-Saharan Africa (21.3%) and upper middle-income countries (47.9%).[1] Banking sector assets reached 68.5% of GDP in 2017. The banking financial sector is regulated by the Central Bank (Bank of Namibia, BoN), which regularly publishes supervisory reports on the sector's trends and stability. The monetary authorities apply a monetary policy anchoredto South Africa.

Despite their large size, non-banking financial institutions are poorly supervised. No risk-based supervision has been established. The Namibian Financial Institutions Supervisory Authority (NAMFISA) currently exercises mainly compliance-based oversight; concerted efforts are being made to amend existing legislation. Moreover, the stock market is characterised by both supply and liquidity weaknesses. Although the capitalisation of the Namibia Stock Exchange (NSX) is ten times higher than the GDP, there are only 8 listed national equities, representing 1.85% of market capitalisation. The other listed securities are double-quoted shares mostly with a principal listing on the Johannesburg Stock Exchange.

Banking Sector

In 2018, the four largest banks in the country held 98.9% of total banking sector assets. The number of assets in the sector have steadily increased from NAD 67 billion in 2012 to NAD 132.2 billion in 2018, i.e. a 12% average annual growth. Loans and advances in the same year accounted for 72.1% of bank assets (73% in 2017) and 50.4% of GDP (50.7% in 2017).

Credit structure and banking sector deposits - Loans and advances steadily increased from NAD 50.55 billion in 2012 to NAD 96.91 billion in 2018; i.e. a 91.7% increase in 6 years. Real estate loans were on average 52% of total loans granted between 2012 and 2018. Loans granted to individuals accounted for 47% of total loans and advances, far ahead of those extended to businesses in the productive sectors of the economy. Bank deposits are mainly from financial, mining and public sector depositors.  This increased steadily from NAD 55.33 billion in 2012 to NAD 98.23 billion in 2018. A deposit structure of this nature tends to create a bias in favour of short-term maturity over long term maturity. Basel III liquidity standards are implemented by the Central Bank to mitigate the reliance of banks on large volume deposits typically made by institutions due to the short-term nature of funds and the high volatility that characterises them. The introduction of the Basel III liquidity framework should lead banks to diversify their sources of financing in terms of both depositor types and maturity horizon, to avoid significant gaps between the maturities of assets and liabilities.

Financial strength of the banking sector - Between 2012 and 2018, capital and liquidity levels in the banking sector remained in line with regulatory standards. The quality of bank assets, however, has gradually deteriorated since 2016, due to the economic slowdown. This decline was most pronounced in 2018 in agriculture and the wholesale and retail trade sectors. Job losses and pressures on disposable income have resulted in a significant increase of the non-performing loans ratio, from 2.5% in 2017 to 3.6% in 2018 (although still remaining below the 4% maximum threshold). The provisions allocated to non-performing loans, which steadily declined between 2015 and 2017, increased to 19.1% in 2018. The deterioration in asset quality did not impact return on assets (2%) and equity (18.5%).

In September 2018, the Central Bank introduced new capital rules under the Basel III capital adequacy regime, which became applicable to all banking institutions and bank-controlled companies designated to be of national systemic importance.

Deposit and lending rates - Monetary policy guidelines implemented by the Monetary Policy Committee aim to support the domestic economy through accommodative policies while maintaining a monetary anchor with the South African Rand. The readjustment of preferential loan rates by commercial banks has been in line with the main policy rate (repo rate) trends. Interest rate trends generated an interest spread of about 4% between 2012 and 2017. Monetary authorities kept the policy rate at 6.75% in 2017.

Financial Inclusion  

Reinforcing financial inclusion is a key pillar of Namibia’s financial sector strategy. This strategy aims to reduce the level of financial exclusion from 51% in 2007 to 26% by 2021. Important progress was made between 2014 and 2017, making Namibia a country with a significantly higher level of financial inclusion than average sub-Saharan African countries and upper middle-income countries (UMIC) for the majority of indicators selected by the World Bank's Global Findex. The proportion of adults with an account increased by 37.1% from 58.8% to 80.6%, well above the sub-Saharan (42.6%) and UMIC (73.1%) average. Mobile financial services are largely responsible for this progress, as the number of mobile money accounts has tripled over the period. However, these outcomes only concern 43.4% of people aged 15 and above, i.e. less than half of the adult population, thus illustrating the potential for growth.

Findings from a recent survey on financial inclusion in Namibia show that 78.0% of adults were financially included in 2017, of which 72.6% were officially served (67.7% by commercial banks and 52.8% by formal non-banking institutions) and 23.9% by informal financial mechanisms (NSA, 2018). The same survey reveals that the proportion of the financially excluded population decreased from 31% in 2011 to 22% in 2017. Several factors contributed to this improvement. The majority of commercial banks manage portfolios of microcredit dedicated to individuals and small- and medium-sized enterprises (SMEs). The development of the sector, which has also been characterised by technological innovation with modern infrastructure such as online banking and mobile services, has greatly contributed to the financial inclusion of the unbanked population. The expansion of bank branches and agents played a role in improving financial inclusion in Namibia. However, despite the sophisticated financial system, a significant proportion of the rural and low-income population remains excluded from formal financial services. A key reason is the high concentration of the banking system, which has reduced banking sector competition and innovation. Banks therefore have little incentive to invest in innovation and diversification of their services. Moreover, 30.1% of adults do not benefit from any insurance product or service due mostly to their low income. According to the International Monetary Fund (IMF), financial inclusion should be promoted by digitising social transfers with appropriate guarantees and improving the regulatory framework for microfinance institutions.

The Microfinance Sector

Although performed by bank subsidiaries, microcredit activities are mainly devoted to remuneration for low-income persons. As of 31 December 2017, the microcredit sector had 317 registered micro-lenders and 150 agencies, regulated and supervised by NAMFISA. A microcredit bill was adopted in April 2018 and another bill on the amendment of usury is under consideration. The adoption of the new bill could impose certain limits on the application of the law on usury by lenders. The microcredit sector is mainly fuelled by credit transactions between lenders and term borrowers. Loans increased significantly to NAD 5.5 billion in 2017, a rise fuelled by strong household demand.

Digital Finance

Namibia's national payment system has undergone profound changes over the past decade. Major milestones have been reached, including the introduction of an electronic fund transfer system in 2004, and the establishment of a domestic cards network switch (Namswitch) in 2008.

Digital currency has developed significantly in recent years. It started in 2010 with a single (non-bank) issuer and by end-2017 the country had eight (8) electronic money issuers, including 3 banks and 5 non-banking institutions. The value of transactions increased from NAD 1.5 billion to NAD 10.6 billion between 2013 and 2017. Interoperability has been largely achieved on all retail payment flows, i.e. cheques, electronic fund transfers (EFTs) and cards. However, the interoperability of electronic money issued by both banking and non-banking institutions remains weak. The Central Bank plans to reach 70% interoperability of all payment instruments by 2020 to ensure the efficiency and cost effectiveness of the national payment system. The goal is to achieve complete interoperability by 2025.

SME Financing

SMEs are estimated to have contributed 12% to GDP in 2014. The objective of the line Ministry (Ministry of Industrialization, Trade and SME Development) is to promote industrialisation through the development of micro-, small- and medium-sized enterprises in Namibia, and raise the contribution to 20% of GDP by 2022. These projections are based on the expected growth of the SME sector accruing from targeted interventions such as the provision of production equipment to SMEs, improved access to affordable financing and enhanced mentoring and training through the establishment of technology centres.

More than 15,000 SMEs were registered between 2000 and 2017, of which 605 were financed by commercial banks. However, 1,719 registered SMEs reportedly closed between 2015 and 2016 despite the support services and professional training they received from Namibian advisory bodies and other financial institutions including commercial banks. In 2012, the authorities set up SME Bank Limited, specialising in SME financing. This bank was placed on provisional administration on 11 July 2017. Since end-November 2017, SME Bank has been declared insolvent and forced to end its activities.

SMEs face significant impediments to access financing. Credit guarantee requirements complicate SME access to financing due to the lack of a secure transaction system and a register of movable asset guarantees. An obsolete insolvency regime creates uncertainty for debtors as it does not allow effective exit mechanisms in the event of default. According to the IMF (2017), improvement of the SME credit information system, securing of the transaction framework for movable assets and implementation of a modernised insolvency regime would facilitate SME access to financial services.


Namibia’s insurance sector, which for long remained attached to the South African model, is gradually adapting to the local environment. In the first quarter of 2015, about half of the parent companies of Namibia’s registered insurers were in South Africa. As of 31 December 2017, the life insurance sector involved 5,015 stakeholders, in comparison to 1,472 for non-life insurance. Total gross premiums (life and non-life insurance) increased steadily from NAD 8.25 billion to NAD 12.79 billion between 2012 and 2017, i.e. an average annual increase of 9.16%. Gross premiums amounted to 7.1% of GDP in 2017 (6.8% in 2016). In 2017, life insurance accounted for 71% of gross premiums written. The insurance sector assets have increased steadily from NAD 34.66 billion in 2012 to NAD 60.12 billion in 2017, i.e. an increase of 73.6%. Minimum capital requirements are NAD 1 million for any life or non-life insurance activity in any category (NAD 5 million for reinsurance), or NAD 4 million for any activity in 2 or more life and non-life insurance categories (NAD 10 million for reinsurance). Between 2012 and 2017, the life insurance sector remained financially stable, solvent and well capitalised. The capital requirement coverage ratio[1] has remained in line with the minimum required for the entire sector.

The Capital Market

In 2017, the capital market comprised a stock exchange, 26 investment managers, 3 related investment service providers and 4 stockbrokers. Mutual funds included 14 trust fund management companies and 22 unlisted investment management companies. The Namibian Stock Exchange (NSX) had 45 listed securities and 4 exchange-traded funds as of 31 December 2017. The overall market capitalisation of companies listed on the NSX was NAD 2,083 billion in 2017, while that of firms operating exclusively on the national territory was valued at only NAD 36 billion. The annual ranking of the African Bond Market Development Index published by the African Financial Markets Initiative (AFMI) puts Namibia in 4th place in 2017 (5th in 2016). Pension funds account for 52% (NAD 85.4 billion) of total stock market assets, compared to 19.1% and 16.1% for trust funds and insurance companies, respectively. In 2017, 58.1% of assets managed under mutual funds were invested in Namibia, 33.5% in the common monetary area and 8.4% in offshore investments. The asset class breakdown shows that money market instruments are the preferred asset class, accounting for 64.2% of total assets under management, while quoted shares accounted for 19.1%.

The Social Protection System

The pension system is the largest segment of the non-banking financial institution sector in Namibia. It consists of a universal pension plan and non-contributory occupational plan covering approximately 30% of the active population. The sector is dominated by the Government Institutions Pension Fund (GIPF), a fully funded defined benefit plan covering more than 100,000 public sector workers. The funds totalled 333,179 members as of 31 December 2017, of which 289,241 were active members and 43,938 were retired. The decline in membership since 2014 was due to the widespread difficult economic conditions that led to job losses. Perceptible improvements in some key sectors have been reflected in the marginal growth of active members. Received contributions increased steadily from NAD 3.9 billion in 2012 to 6.8 billion in 2017, an increase of 74.3%, supported in part by an increase in low-income members. Investment assets amounted to NAD 151.4 billion compared to NAD 135 billion in 2016, with the increase in return on investments mainly related to stock market performance and the rising level of total investment. Pension fund assets increased steadily from NAD 85,757 million in 2012 to 152,885 million in 2017. The sector as a whole has maintained an adequate level of financing and liquidity.

[1]       According to the World Bank (2018), Global Financial Development Report 2017/2018. Data contained in this report is from 2013-2015

[2]     The CAR cover ratio indicates the financial strength of a long-term insurer. It defines the capital adequacy ratio (CAR) by surplus assets (assets exceeding the liabilities determined on a statutory basis). The required minimum is 1 (covered once), but 1.5 times coverage is preferable.

Contact Details Information of Banks operating in Namibia







 10 Post St Mall
Private Bag 13402

 (+264) 61 207 41 11


 71 Robert Mugabe Avenue
PO Box 2882

 (+264) 61 283 51 11 


 262 Independence Avenue
Windhoek, Namibia 

 (+264) 61-299 1200 


 2nd Floor Trustco House North 142 Robert Mugabe Avenue

 (+264) 61 290 80 00 


 211 Independence Ave

(+264) 061 299-2222


 12-20 Dr Frans Indongo Street
PO Box 1
Windhoek - Namibie

 (+264) 61 295 21 63 


 161 Independence Avenue

 (+264) 612942126 


 14 General Murtala Muhammed Avenue Windhoek

 (+264) 612709351


 Maerua Mall Officer Tower, 4th Floor Jan Jonker Road Windhoek

 (+264) 833307000


 Agostinho Neto Road P.O Box 5001

 (+264) 83 33 09 000


 Plot 22 Khama Crescent P.O Box 381

 (+264) 612023500


 172 Jan Jonker Road


 (+264) 61 430 1000





Read More

At a Glance

At a Glance Source
Population in thousands (2019): 2,494.53
GDP per capita (current US$) 2019 - World Average 10,721.61: 4,957.45
Account (%) age 15+) - (2014 vs 2017): 59% | 81%
Agriculture Orientation Index - Credit ( Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 0.77 | 0.69
Financial Inclusion Strategies: • Namibia Financial Sector Strategy: 2011-2021• SADC Financial Inclusion Strategy 2016-2021
Domestic credit provided by financial sector (% of GDP) 2017: 78.8
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): 44% | 71%
Remittances % of GDP for 2017: 0,003
Mortgage Interest Rate / Mortgage Term (years): 12.8% | 20

Donor Projects Database


Latest News & Events

Jun 16, 2021 | Voice of America
The United Nations is urging reforms that make it easier for migrants to send money back to their home countries, as it observes its annual Interna