Business has not been good for the infamous cash loan sector, and other micro-lending and credit agreement facilities, during the first months of this year. Namibians borrowed less money in the first quarter of 2014, compared to the last three months of 2013, which caused a huge dent in the cash lending business - a whopping N$151.1 million decrease in the value of loans disbursed.
According to the just released quarterly statistical bulletin of the
However, the total loan book value increased by 2.2 percent from N$2.6 billion to N$2.7 billion.
"The slow increase is attributed to the decrease in loans disbursed," Namfisa said.
Namfisa reported the long-term insurance sector's investment income fell by N$322 million in the first quarter mainly due to volatile international markets, but it assured consumers that the fall is not that serious.
According to Namfisa, the average loan amount has also decreased from N$15 978 in the fourth quarter of 2013 to N$15 155 per loan during the first quarter of this year.
As for the long-term insurance industry, the investment income fell to N$828 million from N$1.15 billion. The fall, which Namfisa's CEO
"We have provided a regulatory framework on which regulated entities should invest assets - this is meant to ensure that risk entities are well managed and diversified. A large part of the investments are equity markets which are fairly volatile, that have a significant impact on the income and asset base. This does however not mean assets are threatened in terms of erosion but it simply reflects movement of various factors," said Shiimi during yesterday's press conference.
With the Capital Adequacy Requirement ratio standing at 6.58 times for the first quarter, Shiimi says this should amplify "the financial soundness of insurers and is by far in excess of the acceptable norm of 1.5 times".
Shiima noted that Namfisa would only become concerned if movements on the international markets become excessive.
The total gross premiums for the long-term insurance industry fell by 0.81 percent from N$1.54 billion to N$1.53 billion.
The decline of the total gross premiums is attributed to the decline in new policies written, surrenders, policy lapses and maturities.
The long-term insurance industry during the first quarter paid N$1.20 billion in total benefits consisting mainly of maturity claims, group member withdrawals and surrenders.
The long-term insurance industry's assets increased by 3.1 percent to N$37.1 billion in the previous quarter. During the same period, the short-term insurance industry incurred claims of N$466.6 million.
According to Namfisa, the claims are a result of the festive and rainy seasons, due to burglaries, car accidents and an increase in floods.
The bulletin also showed the medical aid fund industry increased by 842 members to 176 120 during this quarter.
It further stated that principal members increased by 1 192 while members, dependants and pensioners decreased by 243 and 107 respectively during this quarter.
"Overall, the growth of membership since the first quarter of 2013 has been steady but slowing," stated the bulletin.
As for pension funds, contributions to retirement funds now stand at N$4.4 billion, indicating an increase of 13.9 percent.
As expected, the
"The funds and reserves of the industry increased by 22.7 percent, which indicates an overall positive growth in the members' fund credits," reported Namfisa.
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