HELPING NAMIBIANS PLAN FOR
LIFE EVENTS
Friendly Societies are member-focused organisa-tions that help Namibians to become financially in-dependent and plan for life events through the provi-sion of savings, investment and insurance products. These include education savings plans, health, granting of annuities, provision of a sum of money upon a member leaving employment due to various reasons such as dismissal and resignation, mainte-nance of members in distressed circumstances, and funeral plans.
All Friendly Societies are regulated by the Na-mibia Financial Institutions Supervisory Authority. Friendly Societies are subject to prudential regula-tion to safeguard the financial interests of the mem-bers and secure the benefits promised to the mem-bers. Friendly Societies are registered under the Friendly Societies Act No. 25 of 1956.
PLANNING FOR THE FUTURE
Friendly Societies help individuals and their fami-lies prepare for a range of life events, such as educa-tion and training, funeral and retirement.
Friendly Societies offer a range of products – rang-ing from education, saving plans, funeral plans, income plans, etc – to allow individuals and their families to plan for the future with confidence.
In a Friendly Society arrangement, members typi-cally pay a regular membership fee and hold regu-lar meetings. If, for example, the Friendly Society’s objective is to cover medical costs, and a member or beneficiary become sick, they would normally re-ceive an allowance to help them meet their financial obligations, or if the Friendly Society’s objective is to cover funeral costs, when a member dies, the ben-eficiaries will receive an allowance to cover funeral costs of the deceased member.
The membership fees and investments made by Friendly Societies are managed by the managing committee of the Society to give the members ben-efits in time of need. Pensions, sickness payments and marriage and death grants are all benefits that could be offered by Friendly Societies.
In order to register a Friendly Society, the grouping involved must draw up a set of rules governing the operation of the Society. The rules must, according to the class in which the Society is to be registered, as a minimum contain the matters to be provided for in terms of Section 13 of the Friendly Societies Act, 1956.
WHY TAKE A FRIENDLY SOCIETY
APPROACH?
Friendly Societies came to prominence in the 19th century. They are a way for people to band together and offer each other financial help and assistance in the absence of support from the welfare state. Al-though the state has increasingly provided help in terms of provision for health care, medical care, education and social grants, these are not enough to meet the increasing demand and there is, therefore,a need to complement this effort through the forma-tion of Friendly Societies.
In addition, Friendly Societies are owned, managed and run solely for the benefit of the members. There are no shareholders to pay dividends to and there-fore all the benefits belong to the members of the Society.
WHAT ARE THE RISKS
Friendly Societies do face the same risks as many other investments, such as fluctuations to some ex-tent with the state of investment markets and there-fore, like most investment products, the investment return is not guaranteed.