In 1976 first microcredits were issued by the Grameen Bank in Bangladesh. The system invented by Dr. Muhammad Yunus is, according to the UN, a major contributor on the way to achieve the Millennium Development Goals. Mr. Cyril A. Ogbokor, Head of Department of Economics at the Polytechnic of Namibia, discusses in an interview with "entwicklungshilfe-blog.de" the current status of micro financing implementation in the Republic of Namibia. 

 

 

 

entwicklungshilfe-blog.de: Namibia is independent since 1990 and tries since then to create institutional strength. Did Namibia succeed to create a reliable system of microcredit financing?

Ogbokor: The establishment of a microcredit financing system in Namibia is still ongoing and rather shaky. Microcredit financing system in Namibia is still far from being realized.

entwicklungshilfe-blog.de: Which institutions grant micro-credits in Namibia? Are they privately or publicly owned?

Ogbokor: Currently, the Development Bank of Namibia is the main institution responsible for supplying the bulk of micro-credits. Besides, some of the commercial banks in Namibia, especially Bank Windhoek do also provide micro-credits. Commercial banks in Namibia are privately owned, while the Development Bank of Namibia is a public institution. The good news is that the government is in the process of establishing an SME bank specifically to address issues relating to micro credits.

entwicklungshilfe-blog.de: Microcredits are said to be important in terms of the economic development of a country since they are mostly granted to women. The percentage of back payment is around 95%.The Wall Street Journal recently raised doubts if these numbers are true.   Are there reliable Statistics for Namibia?

Ogbokor: Evidence from Namibia suggests that a great deal of eligible applicants soliciting for micro-credits are unable to access such funds due to a number of primordial factors cutting across politics, favoritism, tribalism etc. Besides, currently only certain cliques seem to be benefitting extensively from such funds. Mostly men are getting access to these funds compared to their female counterparts.

entwicklungshilfe-blog.de: Do you think microcredits supports women in terms of gender equality?

Ogbokor: Micro-credits will only support women in terms of gender equality if more and more women are increasingly empowered through such funds. Currently only few women are beneficiaries of micro-credits in Namibia.

entwicklungshilfe-blog.de: Critiques dispute that micro credits are not sustainable since they require financial subsidies of the government in the long run. How do you think micro credits affect public debt on the one hand and economic development on the other hand?

Ogbokor: It is possible through careful planning to sustain the micro-credits. It is only possible for micro-credits to increase the debt of the government. However, if micro-credits are able to promote industrialization activities (manufacturing), especially through small and medium scale enterprises, which in turn leads to a positive multiplier effect and adding value to the economy, then sustainability and the fear of incurring more debts through micro-credits will no longer be an issue.

entwicklungshilfe-blog.de: One of Namibia’s biggest challenges is economic inequality.  It is argued that the access of micro financing is often very difficult especially for the lowest income group. Are credits a step towards equality or do you think that it will increase the gap of income inequality?

Ogbokor: Micro-credit in Namibia is capable of worsening the wide income disparity already existing between the poor and the rich given the fact that the low income group can hardly access micro-credits in Namibia.

entwicklungshilfe-blog.de: More than 21% of the Namibians are Aids/HIV infected. People suffering from poverty often don’t have passports or are not mobile enough to reach financial institutions. Are these barriers to get financial aid? What are the requirements to be accepted for a loan?

Ogbokor: Specific examples of factors usually considered amongst others are:

·        Business Plan

·        Type of business activity

·        Ability to pay back

·        Health status

·        Credit worthiness

Do also note that HIV-AIDS related issues could also implicitly constitute a barrier in accessing micro credits in Namibia.

entwicklungshilfe-blog.de: The financial literacy in most development countries is relatively low.  Which efforts are required and already done by the Namibian government and financial institutions to solve this problem?

Ogbokor: Aggressive educational campaigns using various local languages through the printing and electronic media is recommended.  Also, workshop and seminar fora for discussing micro-credit issues should be given a more practical expression. Some of these strategies have been used over the years but not in an aggressive fashion.

The interview was conducted by Frederik Strompen, Economic student at the University of Muenster and currently studying abroad in Namibia. Mr. Cyril A. Ogbokor is currently serving in the capacity of a Senior Lecturer as well as the Head of Department of Economics at the Polytechnic of Namibia.  He did his undergraduate studies at the University of Benin in Nigeria and subsequently earned his M.Sc. degree from the University of Lagos in 1986. He is currently in the process of concluding a Ph.D degree programme in economics with the Bircham International University based in Spain. He has an extensive experience in teaching at the tertiary level. Over the years, he has taught at the following tertiary institutions:  University of Uyo in Nigeria, Nigerian Military University in Kaduna, The Institute of Higher Education, (now the International University of Management in  Windhoek, Namibia), the University of Abuja, Nigeria, and more recently MANCOSA and REGENT Colleges based in South Africa on part-time basis. In all, he has approximately twenty four years of tertiary teaching experience. His principal research areas are macroeconomics, international economics, and labour economics, including econometrics. Besides, he has publications in these areas in various Peer Reviewed Journals. In recognition of his research and publication outputs, he was nominated and subsequently won the Polytechnic of Namibia’s best Researcher award in the School of Business and Management during the institution’s Staff Development Day in November 2002. He has also received similar recognition through his research and publications within Namibia as well as in the international arena. He is looking forward to winning and receiving more of such awards, honours and recognition in the near future.