When banks work against business

THE ONGOING MEDIA REPORTS concerning the enforcement of a High Court order against Benjamin Hauwanga, owner of the BH Group of Companies, are deeply concerning.At face value, this may appear to be an ordinary legal process through which a financial institution seeks to recover money owed to it.However, looking beyond the legal dispute, the consequences could be devastating, not only for the businesses concerned but also for employment and Namibia's broader economic transformation.We need an honest and serious conversation about how our financial institutions deal with Namibian-owned businesses, particularly those that have emerged from historically disadvantaged communities.Our banking and financial system is, in many respects, not sufficiently responsive to Namibia's developmental needs. Commercial banks have increasingly adopted lending and credit recovery practices that appear to place their own financial interests above the broader economic value of the businesses they finance. Consider the following.In 2025, the then president of the African Development Bank Group, Dr Akinwumi Adesina, said: "The cost of capital in Africa is three to five times higher than in any other part of the world."That same year, he also said: "The commercial banking system, the financial system, has failed young people in Africa."I fully agree with him.CONSEQUENCESIt cannot be right that a business which has taken years to establish and created jobs for hundreds of Namibians can be brought to its knees through legal processes without sufficient consideration of the wider consequences.A business is more than an asset on a bank's balance sheet. Businesses provide essential goods and services to communities that are often neglected by mainstream commercial activity.Who takes over the services BH Group provides if it is brought to its knees? Will the bank provide the children of Ongwediva with the recreational facilities they enjoy at Bennie's Park? Will it supply the corrugated sheets, water tanks and car parts that residents of Omutsegonime, Aussenkehr, Katjinakatji, Opuwo and Olundjinda depend on?What becomes of the employees whose livelihoods depend on the business? And will the bank replace the PAYE, VAT and corporate income tax that BH Group pays to NamRA?Another worrying pattern is the apparent use of subjective or unsubstantiated grounds by financial institutions to deny or terminate banking relationships. Allegations that a client is aggressive or difficult towards bank employees should not, on their own, become a convenient basis for excluding that client from the banking system. Financial institutions must be held to standards of fairness, consistency and accountability.WHAT MUST CHANGEOur financial institutions, including foreign-owned banks operating in Namibia, should be expected to contribute meaningfully to economic transformation. This could include allocating a defined portion of their profits to developmental financing, providing more affordable capital to Namibian entrepreneurs, emerging businesses and innovators.Regulators must also take a more active role in shaping a financial environment that responds to the needs of our economy. Namibians from previously disadvantaged communities should have access to appropriate and preferential financing products to address their historical exclusion from capital, property ownership and business opportunities.Namibia could also explore business continuity insurance to protect viable businesses against unforeseen financial shocks, much like insurance protects homes against fire.We must examine how commercial disputes involving businesses are handled in our courts. There should be a clear distinction between the legitimate enforcement of contractual rights and the destruction of businesses through procedural technicalities. No business should be pushed into liquidation or foreclosure merely because of a procedural or technical legal victory, particularly where the underlying dispute has not been determined on its merits.This is not to suggest that businesses should escape their contractual obligations or that banks should be denied legal remedies.Rather, this is a call for care, fairness and proportionality. Where a business remains viable, every reasonable opportunity should be given to restructure or resolve the dispute on its merits before liquidation or the sale of assets.Relevant state institutions should investigate whether foreclosure and liquidation processes are consistently fair and transparent, including what happens to assets once they have been attached and sold, who acquires them and at what prices.We simply cannot continue speaking about empowerment, local ownership and wealth redistribution while allowing Namibian businesses to be weakened or destroyed.This should serve as a wake-up call to the Namibian business community.Businesspeople must stand together and speak with a stronger, more united voice. An injury to one Namibian business should be a concern to all of us.Our financial system must work with our economic development agenda.Desmond Amunyela is executive director of Paragon Investment Holdings and a board member of the Namibia Chamber of Commerce and Industry (NCCI). He writes in his personal capacity.

When banks work against business

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Republikein 2026-11-16

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When banks work against business

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Republikein 2026-11-16

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