Financial Crime World

Risk Assessment Highlights Low to Medium Risks in Namibia’s Non-Banking Financial Sector

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A recent risk assessment conducted by the National Association of Municipal Finance Institutions (NAMFISA) has identified low to medium risks in the non-banking financial sector in Namibia.

Methodology and Findings

The assessment, which covered various sectors including unit trust schemes, investment managers, stockbrokers, and friendly societies, among others, highlighted that money laundering (ML), terrorist financing (TF), and proliferation financing (PF) risks are present but manageable. The assessment was conducted using a methodology that involved collecting data from authorized institutions and regulated entities through questionnaires, on-site and off-site inspection reports, and other sources.

According to the report, ML risk scores ranged from 0.5 to 3.0, with most entities falling in the low to medium category. TF risk scores were similarly distributed, ranging from 0.5 to 2.0. PF risk scores, however, were found to be higher, with some entities scoring as high as 4.0.

Stakeholders Relevance

The assessment is relevant to various stakeholders, including:

Regulated Entities

  • Consider the SRA when preparing or updating institutional risk assessments (IRAs)

Financial Intelligence Centre (FIC)

  • Understand the manifestation of ML, TF, and PF risks in the non-banking financial sector
  • Provide risk-sensitive guidance on supervisory and regulatory activities

Namibia Stock Exchange

  • Understand the manifestation of ML, TF, and PF risks in the stockbroking community
  • Apply risk-sensitive regulatory measures to ensure effective risk mitigation and management

Relevant Associations

  • Understand the risks posed by their members and clients
  • Apply a risk-based approach when representing the interests of their members in relation to AML/ CFT/CPF obligations

Conclusion

The full report is available on NAMFISA’s website for those interested in learning more about the findings and implications. The assessment is expected to inform regulatory interventions and supervisory activities aimed at mitigating the risks identified, and will be used by key stakeholders to improve their risk management practices.