Financial Crime World

Namibia’s Money Transfer Fraud Schemes Reach Alarming Proportions: Over N$26 Million Lost in 2023

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According to recent reports, a staggering total of 357 fraud cases were reported in Namibia last year, resulting in losses amounting to a whopping N$26.3 million. The alarming figures were revealed by Finance and Public Enterprises Deputy Minister Maureen Hinda-Mbuende during the presentation of the Bank of Namibia’s annual results in Windhoek on Tuesday.

Types of Fraud

The reported fraud cases included:

  • ATM fraud
  • Electronic fund transfers
  • Credit and debit card fraud
  • Mobile application fraud
  • Theft of cash

These types of fraud may be flourishing due to internal and external negligence, and raise questions about whether there are adequate measures in place to compensate for the losses suffered by individual clients.

Banking Sector Performance

The banking sector has managed to recover N$4.8 million of the losses, but the sheer scale of the problem remains a cause for concern. Despite this, the banking sector has remained profitable, with an income of N$12.8 billion and a net income after tax increase of 24.5% to N$3.7 billion.

Risks to the Banking Sector

Hinda-Mbuende warned that climate change, greylisting, and cybersecurity threats pose significant risks to the banking sector in the future. She also cautioned against raising interest rates, as this could lead to borrowers defaulting on loans, particularly mortgages.

Credit Risk Remains a Key Concern

The credit risk remains a key financial risk factor, with non-performing loans increasing by N$456 million to N$6.5 billion. More than 50% of this increase is attributed to mortgage loan defaults. With mortgage loans accounting for over half of total private sector credit extension, Namibian banks are considered highly exposed to mortgage risk.

Call to Action

As the country continues to grapple with these financial challenges, it remains essential that stakeholders work together to address the issue of money transfer fraud and ensure the stability of the financial system.