First National Bank Namibia recently launched a “collective buying” product, marketed as a novel solution to Namibia’s housing crisis. While the initial public reaction was positive, we are alarmed by the way it masks a deeper rot in housing finance, serving bank profits above real reform. FNB’s collective buying initiative continues the exploitative nature of banks in housing finance. At the same time, no real attempt is being made to address the root causes of the housing crisis in the country. Arguably, shared financial responsibility is a key benefit of this initiative. But the main beneficiary is FNB itself. This initiative will ensure that a collective of borrowers minimises defaults on housing loans. Additionally, there is hardly anything transformational about this product. We, therefore, hope that house-hungry Namibians will not fall for this move, the main purpose of which is to increase banks’ profit margins.
Former minister of rural and urban development Erastus Uutoni rightly points out that this initiative is not a solution to the country’s housing crisis. Similarly, former parliamentarian Maximalliant Katjimune emphasizes the importance of looking at the root causes of why the average Namibian cannot afford property. The housing crisis in Namibia is sustained by insatiable greed, as illustrated by the exorbitant costs accrued by borrowers over the years, often exceeding the property’s value itself.
Deputy Prime Minister Natangwe Ithete likened the cut-throat approach of banks in home loans to that of a “mafia cartel,” highlighting the ruthless tactics employed. Minister of Works and Transport, Veikko Nekundi, expressed concerns about the heartless actions of banks, driving ordinary citizens into a roofless environment with their relentless pursuit of profit. Despite these voices advocating for change, commercial banks in 2023 put 277 homes up for auction, further exacerbating the emotional and financial distress of Namibian families.
While families faced the loss of their homes, major banks in Namibia reported staggering profits in 2024, indicating a disconnect between the banking sector’s gains and the housing crisis gripping the nation. Home loans constitute a significant portion of credit extended in the local market, contributing to the super profits banks continue to accumulate despite economic downturns affecting other sectors.
Addressing the housing crisis requires concrete policy interventions. Namibia’s commitment to protecting human dignity, as enshrined in the constitution, necessitates measures that safeguard homeowners from predatory lending practices. Proposed legislation to cap home loan interest rates at 7% over a maximum period of 10 years could strike a balance between banks’ profitability and citizens’ financial well-being. The government must take proactive steps to regulate the banking sector and prevent further exploitation of vulnerable homeowners.
In conclusion, the housing crisis in Namibia is a complex issue that demands immediate attention and decisive action. By shedding light on the exploitative practices of banks and advocating for legislative reforms, there is hope for a more equitable housing finance system that prioritizes the well-being of citizens over excessive profits. It is crucial for stakeholders to collaborate and push for meaningful change to ensure a sustainable and just housing market for all Namibians.
