Why should there be regulation and supervision
of financial institutions?
Regulation and supervision of financial
institutions are a distinctively different set of activities.
Regulation entails the setting of an appropriate legal
framework (laws, regulations, standards, directives); setting
the rules of engagement in the sector.
Supervision of financial institution entails the
implementation, monitoring and enforcement of regulations.
These activities are a part of the process of ensuring
that the financial sector in Namibia is orderly, reliable and
delivers quality products and services.
They also ensure that the sector remains fair and
transparent, performs its economic intermediary role
effectively and efficiently and most importantly regulation
and supervision must instil confidence and attract and retain
current and prospective local and international participation
and investment in Namibia.
NAMFISA draws its mandate from the Financial Institution
Supervisory Authority Act, Act 3 of 2001).
The role and quality of regulation and supervision of
financial institutions performed by NAMFISA is particularly
important in the NAMIBIAN context because it facilitates
components to the achievement of our national objectives
and aspirations of Vision 2030.
In addition, NAMFISA plays a pivotal role in ensuring
the fulfilment of basic human rights for all of our people as
enshrined in our constitution.
Thus, it entails among other things, freedom of choice, fair
treatment and the right to be heard when aggrieved.
As far as national objectives are concerned, NAMFISA
regulates and supervises the financial institutions in a manner
that encourage inclusion and access to financial services by
the large number of Namibians who do not have access. In
the same vein, NAMFISA ensures growth and development
and ultimately assists in the reduction of the prevailing high
unemployment rates in the country.
As far as confidence in the financial sector is concern,
NAMFISA ensures that only credible financial institutions
are allowed to operate in the economy.
This is done through licencing and prudent regulation and
supervision of financial institutions by setting and enforcing
regulations aimed at financial soundness with the view to
ensure that such entities will be able to honour their financial
obligations to the investing public.
In conclusion, NAMFISA’s regulatory and supervisory
roles are critical for the achievement of effectiveness and
efficiency of the financial sector, alleviation of poverty and
reduction of unemployment, protection of consumers,
enhancing consumers financial literacy, and attainment of
Vision 2030.
