The Namibian financial system comprises the Bank of Namibia as the central bank, commercial banks, a number of other banking institutions, a range of nonbank financial institutions such as insurance companies and pension funds, smaller financial intermediaries in the form of stockbrokers and money market funds, and the Namibian Stock Exchange.

The importance of the financial sector to the general economic growth of a country is well documented, especially through the intermediation channel. When financial services are supplied broadly and efficiently, they accelerate economic growth, increase the efficiency of resource allocation and improve the distribution of wealth.

Financial depth is measured as deposit resources mobilised and credit extended by the financial system (banking) relative to GDP. Although the depth of the Namibian financial system is relatively higher (compared to other countries in the region), there is still room for growth and expansion in order to reach a higher level comparable to the developed nations.

This would require growth of the financial sector by reaching those segments of the population currently not served by it.

Non-bank financial institutions comprise of insurance, pension funds, investment managers, unit trusts, microfinance institutions, a stock exchange and stock brokers.

Namibia has a high number of registered pension funds. There are over 167 active registered pension funds (excluding foreign funds), which covered about 161 478 members.

There is a need to expand the pension coverage in Namibia, since the existing pension funds do not extend to all Namibians. Therefore, there are efforts underway to establish a National Pension Scheme that will cover all Namibians.

Namibia has one of the highest rates of pension assets as a percentage of GDP in the world, accounting for 75.1% of GDP. The assets of insurance, pension funds and medical aid funds are included in the assets managed by investment managers and management companies.

In addition, a portion of assets managed by management companies are also managed by investment managers. There is, therefore, considerable double counting of assets.

Local investment requirements compel pension funds and long-term insurers to invest a minimum of 35% of their assets in Namibia so as to curb capital outflow and ensure effective utilisation of funds in the local economy.

The total registered investment managers or asset management companies in Namibia are over 35, while the total funds under management was recorded at N$86.1 billion as at the end of 2010.

Investment managers mainly invest the resources from pension funds, long term insurers and unit trust schemes. In 2010, investment managers invested about 55.3 percent of total assets from pension funds and 14.1% from long-term insurers.

The Namibian Stock Exchange (NSX) is the only licensed stock exchange in Namibia in terms of the Stock Exchanges Control Act (No.1 of 1985). Securities listed on the NSX consist of primarily dual-listed South African companies and primary-listed Namibian companies.

There are about 4 registered stockbrokers in Namibia, who act as intermediaries between investors and the stock exchange.