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Saturday 20 April 2019
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Banks reluctant to share car repossessions figures

While less people are buying motor vehicles, mainly due to the precarious economic situation in the country, local banks are reluctant to release figures related to bank repossessed vehicles.
Official statistics indicate that vehicle sales for the month of September have contracted compared to the same period last year.
Over 100 vehicles went under the hammer this year at various car auctions this year as many car owners failed to service their loans.
The Patriot sent questions to the country biggest banks- First National Bank, Standard Bank, Bank Windhoek and Nedbank- but only FNB and Bank Windhoek provided a response, albeit without statistics.
Namibia’s vehicle sales for September 2017 contracted by 7.1% year-on-year, a slight improvement when compared to a 23.9% contraction recorded in the prior year.
Year – to- date (ytd), vehicle sales contracted by 27.9% to 9 410 units when compared to 13 058 units recorded during the same period last year. In contrast, vehicle sales recorded positive growth of 6.3% m-o-m to 1 163 units compared to 1 094 units in the prior month.
The monthly upsurge was particularly reflected in the category of Passenger and medium commercial vehicles, which improved by 10.8% and 116.7%, respectively. Commercial vehicle sales are often seen as an indicator of economic growth.
On an annual basis, vehicle sales have been in a negative territory over a prolonged period since July 2015. We view that continuous contraction in instalment credit lending by commercial banks will continue to be a drag on an already struggling motor industry as well as the economy.
Some financial institutions have also come under scrutiny for allegedly offering vehicle loans to clients whose income does not allow them to service their monthly repayments.
In many states, creditors seize your vehicle as soon as you default on your loan or lease. Contracts should state what constitutes a default, but failure to make a payment on time is a typical example.
FNB’s Group Communications Manager for Strategic Marketing & Communications, Elzita Beukes explained that “it is not easy to assist with this information because it constitutes confidential information between customers and WesBank and in aggregation it is available internally for reporting purposes only.”
“The only public information is indeed that supplied through external sources such as BoN for example, that speaks to overall increases and declines of the industry, again not specific to any particular bank’s proprietary information,” she said in an emailed response.
Commenting on the rising debt as an indicator towards payment defaults and repossessions, and over-commitment by consumers to unaffordable consumption< Beukes urged clients to pursue a saving culture.
“Our recent public reminder to fellow countrymen to save, and the provision by us of a free saving account with no charges is an attempt to encourage us all to save for the things we want, rather than lend unaffordably and unsustainably,” she said.
She added: “Some financial institutions today could trap you in by offering low entry rates, and balloon options indiscriminately, opening unsustainable debt to unsuspecting consumers who think they are getting a great deal now, but without thinking through whether they can deliver on the long-term payments commitment they’ve just made.”
She said “WesBank has always preferred to properly partner its customers, making sure as far as possible that asset finance offered is indeed affordable to the specific customer’s lifestyle profile, and often offering alternative solutions for better investment at rates and prices better suited to one’s financial reality, rather than selling pipe dreams to customers, only to have to repossess these ‘dreams’ later.”
Another bank, Bank Windhoek also shied away from presenting vehicle repossession statistics but indicated that the repossession of cars, is in most cases a last resort.
“Bank Windhoek is proud to be a responsible lender and we take various factors into consideration before we finance vehicles and other assets. We invite clients to discuss their financial challenges with the bank to find mutual solutions. A car sold on an auction is a lose-lose situation for both parties,” said Jacquiline Pack, Executive Officer for Marketing and Communication services.
Pack said there are various factors that contribute to the challenges faced by clients to meet their needs. It is general knowledge that the slowdown in the economy resulted in a decrease in spendable income which is further exacerbated by a high debt to income of individual households.
“Some factors to further consider include retrenchment, as a result of poor payment by debtors to companies; the day-to-day rise in cost-of-living, fuel prices increases, vehicle expenses, the inflation rate, as well as other household increases such as rising water and electricity costs,” Pack said.




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