How To Register A Cash Loan Business In Namibia

How To Register A Cash Loan Business In Namibia

What is a Cash Loan Business?

Cash loan businesses operate in a similar way to banks. Banks however have a ceiling on the amount of interest which can be charged to consumers (stipulated by the Usury Act). All micro lenders must register with the MFRC (Micro Finance Regulatory Council) before commencing operations.

How To Register A Cash Loan Business In Namibia

The applicant will be required to complete the application form and submit the following documentation with the completed application form to NAMFISA: 5.1 A certified copy of Income Tax registration certificate of the Cash Loan Business as issued by the Ministry of Finance.

Frequently Asked Questions (FAQ’s)

Is money lending business profitable in Namibia?

Money lending, hence has always been and will be one of the most lucrative business. The modern day formal financial systems that include banks and NBFCs have made a dent to the profession of money lending by bringing rates down, but these institutes also make handsome money on the loans they give out.

Is private lending safe in Namibia?

Rates charged are risk-based, and private loans are often risky. Any borrower dealing with a private lender is usually doing so because they have exhausted all other options. Due to the increased risk, most private-lending deals pay 10-20 per-cent interest.

Can I legally loan money in Namibia?

It’s legal to lend money, and when you do, the debt becomes the borrower’s legal obligation to repay. You can take legal action against your borrower in the case of a default in small claims court. A loan between loved ones has the same legal weight as a bank loan.

Can I get loan for starting new business in Namibia?

While you can look at investors to invest in your start-up, you also have the option to avail a loan to start a new business. A number of financial institutions offer start-up loans at an attractive rate of interest and flexible terms.

Is private lending a good investment in Namibia?

Sure, this can be risky investing, but you can drastically reduce the risk if you know what you’re doing; and, lending money to a flipper is (typically) much less work, risk and stress than buying a property yourself.

How do I start a successful cash loan business in Namibia?

  1. Stay local.  The private lending business model is most successful when you focus locally. Most of your loans should be within 100 miles of your office. Most of your private lenders will be local to your community. You will succeed in funding loans because you are a local expert and you understand your local marketplace. 
  2. Find your sweet spot.  If the funding capacity of the majority your investors ranges from, say, N$50,000 to N$250,000, then market this range as your niche.  Be honest with your referral network as to your sweet spot.  Besides, a guy that needs a N$50K loan will not be well served by a broker who regularly funds million dollar loans. Build your book of business by starting out small, creating volume, then working your way up to larger loans. You can earn more in fees by doing 5 – N$50,000 loans than 1 – N$500,000 loan or even 1 – N$1 million loan!  You can charge more points on smaller loans, plus the fees.
  3. Focus. Be specific in your advertising and marketing.  Don’t say that you are “nationwide” and you fund “all loan types” and loan amounts.  I guarantee you that brokers who market themselves as such do not have a thriving business.
  4. Strive for total transparency. If you check out our website you will notice that we don’t have pictures of skyscrapers or smiling people in suits shaking hands.  We have pictures of actual deals we have funded.  We have our names, addresses, pictures and email addresses for all the world to see. 
  5. Refer, don’t broker.  We originate loans. We rarely broker loans to other brokers. But we refer deals almost every day. When a call comes in for a loan that’s outside of our area, expertise or capacity, we will refer that caller to one or more brokers from our database of reputable private loan originators. Brokering, in most cases, is a waste of your focus and time.
  6. Coaching, Mentoring & Consulting.  The best investments you can make are in yourself and your business.  Success and leadership coaching are an important part of my life. The books you read, the seminars you attend and the videos you watch will help you to master the disciplines you need in order to succeed in a world full of distractions and naysayers. 

Can you invest in loans in Namibia?

The only time it makes sense to borrow money for an investment—known in financial lingo as “invest a loan”—is when the return on investment of the loan is high and the risk level of the investment is low. It is inadvisable for an investor to invest a loan in a risky vehicle, like the stock market or derivatives.

How do lending companies make money in Namibia?

Mortgage lenders can make money in a variety of ways, including origination fees, yield spread premiums, discount points, closing costs, mortgage-backed securities, and loan servicing. Lenders may also get money for servicing the loans they package and sell via MBS.

How much does it cost to start a finance company in Namibia?

What are the costs involved in opening a financial planning firm? Starting a firm requires you to become a registered investment advisor (RIA), registered with your state. You will spend between $10,000 and $20,000 for basic startup costs.

How do I become a microlender in Namibia?

To become a microlender, you can lend a small amount through a non-profit organization using a valid credit card and a PayPal account. Research organizations online that provide safe and effective microlending opportunities. Select and register with the appropriate organization

How do I start a Cashloan business?

Start a micro lending company by following these 10 steps:

  1. STEP 1: Plan your business.
  2. STEP 2: Form a legal entity.
  3. STEP 3: Register for taxes.
  4. STEP 4: Open a business bank account & credit card.
  5. STEP 5: Set up business accounting.
  6. STEP 6: Obtain necessary permits and licenses.
  7. STEP 7: Get business insurance.

Is starting a bank profitable in Namibia?

Starting your own bank is laborious but profitable. And yet, despite the credit crisis, this is the ideal time to start a bank. Or so say the people who help people start banks. The events that literally shook the foundations of the financial system hardly need repeating.

Is taking loan for business good?

One of the most common ways to raise capital for your business is to take a business loan. A loan is also a better source of capital for a profitable business in comparison with the share capital as you can have a better leverage. You enjoy the surplus of rate of return over the interest you pay for the borrowings.

Can I take personal loan for business in Namibia?

Individuals can avail a personal loan to fund their business at interest rates ranging from 10.75% to 24% p.a. The tenures can range from 12 months (1 year) up to 72 months (6 years). The minimum loan amount can be Rs. 50,000 and the max can be as high as 40 lakhs.

What is the difference between a personal loan and a business loan?

The difference between personal loans and small business loans. Personal loans are guaranteed using your personal credit history. In general, personal loans are meant for personal purchases, whereas business loans are meant to fund business-related purchases.

How much will a bank loan a business in Namibia?

Short-term lenders will typically loan your business no more than 10% to 15% of your company’s annual gross sales. Of course, to receive any capital, you need to meet the lender’s basic qualification requirements.

What type of loan is a small business loan?

Term loans are one of the most common types of small business loans and are a lump sum of cash that you repay over a fixed term. The monthly payments will typically be fixed and include interest on top of the principal balance.

Is lending business a sin?

The thing is, the Bible doesn’t say that debt is a sin, or that you should never lend. In fact there are verses that talk about lending money and receiving interest in a positive light.

How much bank loan can I get for business in Namibia?

Borrowers can avail up to Rs.2 crore as the loan amount, with a maximum loan term of 48 months. The Express Business Loan can be availed by micro SME enterprises if a requirement for funds arises.