MPs call for end to direct salary deductions by microlenders

Members of parliament have called for tighter controls on microlenders’ access to civil servants’ salaries, arguing that direct deductions are worsening the financial strain faced by public servants. The concerns were raised on Friday during a parliamentary economics committee hearing with the Office of the Prime Minister (OPM) and the Public Service Commission. Popular Democratic Movement leader McHenry Venaani said financial institutions often avoid taking lending risks while borrowers are left carrying the burden. “These institutions do not want to take any security risks. Perhaps it is time to stop direct salary deductions and require lenders to make alternative arrangements,” he said. Venaani questioned why lenders are allowed direct access to salaries, arguing that excessive deductions leave many civil servants with little disposable income and contribute to financial stress and mental health challenges. Committee member Sharonice Busch urged the OPM to investigate the interest rates and deductions imposed by lenders and determine how such charges are calculated to enable effective intervention. In response, the OPM said it is implementing reforms aimed at protecting public servants, including programmes focused on employee well-being and financial literacy. The parliamentary committee is expected to meet with the Microlenders Association next week to further discuss the issue. Meanwhile, the Namibia Financial Institutions Supervisory Authority (Namfisa) reported that it secured more than N$1.73 million in refunds and benefits for consumers between January and March. According to Namfisa, complaints received during the period involved long-term and short-term insurance, pension funds, microlending and credit agreements. Most cases were resolved amicably. “The main issues included delays in pension benefit payments, rejected funeral claims, failure to cancel contracts, and delays in death benefit and refund payments,” Namfisa said. The post MPs call for end to direct salary deductions by microlenders appeared first on The Namibian .