Financial Crime World

Identity Theft Financial Losses Reach N$26.3 Million in Namibia

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Namibia has faced significant financial losses due to identity theft and fraud, with a total of 357 cases reported in 2023 resulting in losses amounting to N$26.3 million.

Categories of Fraud

According to Deputy Finance and Public Enterprises Minister Maureen Hinda-Mbuende, the categories of fraud experienced by banking institutions in 2023 included:

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

The banking sector has recovered N$4.8 million of the losses, but Hinda-Mbuende expressed concern that the issue remains a significant challenge.

Illicit Financial Flows

The Deputy Minister also highlighted the need for concerted efforts to curb illicit financial flows, which have been estimated at:

  • N$19.6 billion in inward flows between 2018 and 2020
  • $4.7 billion in outward flows between 2018 and 2020

She emphasized the importance of bolstering cybersecurity defenses to safeguard the integrity of the financial system.

Banking Sector Performance

Despite the slow economic growth, the banking sector has remained profitable with:

  • An income of N$12.8 billion
  • Net income after tax increasing by 24.5% to N$3.7 billion

The growth is attributed to the Bank of Namibia raising interest rates in 2022 and early 2023.

Concerns over Rate Hikes

However, Hinda-Mbuende warned against further rate hikes, citing concerns that it may lead to borrowers defaulting on loans, particularly mortgages which accounted for more than half of the total private sector credit extension. She emphasized that the credit risk remains a key financial risk factor, with non-performing loans increasing by N$456 million to N$6.5 billion.

Challenges Facing the Banking Sector

The Deputy Minister’s warnings come as the banking sector continues to grapple with the impact of:

  • Climate change
  • Greylisting
  • Cybersecurity threats

Despite these challenges, people and businesses continued to seek out products and services offered by non-banking financial institutions (NBFIs), which performed positively in 2023.