FNB accused of premature deductions for uninhabitable Okongo homes
A controversial deal between First National Bank (FNB) Namibia, the Okongo Village Council and OLC Properties CC has allegedly placed several residents under severe financial strain – paying off home loans for incomplete houses while still covering rent for their current accommodations.
Frustrated homeowners, describing the situation as “inhumane”, spoke to Namibian Sun this week to share their grievances.
According to the affected residents, FNB Namibia began deducting monthly mortgage payments from their accounts in December 2024, despite the fact that they have not taken occupancy of the houses, which were built on unserviced land.
This has raised questions about how the bank approved loans for properties that do not meet basic development requirements.
Namibia’s land reform law prohibits the issuance of loans for homes built on unserviced land without an approved layout plan. Basic services – such as water, electricity and roads – must be in place.
Nicolas Richard, speaking on behalf of nine affected homeowners, said he and others are now struggling financially after the developer, OLC Properties CC, failed to deliver fully serviced houses. The company is represented by its chief operations officer, Megameno Gideon.
Located in Block 103, Okongo Proper, the homes were constructed in September 2023. While manholes were installed, Richard said water and electricity connections remain absent.
“We’ve been trying to get answers from the village council, FNB Namibia, OLC, and the Ministry of Urban and Rural Development – without success,” he said.
“They should tell us the truth. If they won’t, we’re taking this matter to the ombudsman. This is unacceptable. We can’t keep suffering like this,” Richard added.
Deteriorating homes
He questioned how the bank could release funds and issue title deeds, knowing the land lacked municipal services.
“This is like funding construction for a village house – something banks usually avoid. I live with my wife, five children, a nanny and her child. It’s too much for one income. My home loan is N$479 720, and I pay N$5 750 monthly, plus N$2 300 rent elsewhere.”
He added: “We’re not living in the houses, but the bank is deducting money. It’s painful. We were told we’d receive the keys once construction was complete – but now we’re stranded.”
A Namibian Sun visit to the area revealed that some of the newly built houses are already deteriorating, with cracks visible in doors and windows as well as leaking roofs.
“The bank should stop the deductions until the houses are connected to municipal services,” Richard said. “If not, they should refund us and sell the houses themselves.”
‘Misunderstanding’ between council and developer
Another homeowner, Costa Medusalem, received a loan of N$630 000 for a three-bedroom house. He now pays N$7 250 per month on the mortgage, plus N$2 000 rent.
In a letter dated 3 February 2025, FNB Namibia’s head of home loans, Susan-Ann Fick, told the clients that the standoff is between the local authority and the developer.
“A misunderstanding has emerged between OLC Properties and the Okongo Council regarding the provision of services. As a result, homeowners cannot occupy the properties due to the lack of municipal services,” the letter reads.
Namibian Sun has reviewed the memorandum of understanding (MoU) signed on 30 September 2022 between OLC Properties and the Okongo Village Council. The agreement required the developer to provide internal services for residential erven at its own cost.
The MoU also required OLC to extend the 11kVA Nored electricity network and construct two substations for low-voltage power supply.
Deal gone wrong
Former Okongo Village Council CEO, Immanuel Haikali – who signed the MoU – said the council was misled by the developer.
“The contractor made a U-turn and did not fulfil their obligations. We’ve since written to the Ministry of Urban and Rural Development for help and are working to secure funds to provide services.”
Haikali said a 90-day notice was given to the developer to comply, but after no response, the agreement was terminated. The developer then claimed the council should provide the services – contrary to the agreement.
He added that a tender for electrification was issued before he left office in January this year and only sewer piping remains incomplete, as manholes are already in place.
“The land was only partially serviced, and the developer was aware. They were supposed to install full services before construction,” Haikali said.
Responsibilities ‘deflected’
FNB Namibia’s communications manager, Kirsty Watermeyer, said the bank is working with all parties to resolve the matter. She explained that when the loans were approved, service installations were reportedly in progress and that a compliance certificate had been received from the village council.
Despite that, she confirmed that full deductions are ongoing even though the homeowners have not moved in. She added that mortgage deductions were delayed by one month in hopes the service issues would be resolved by December 2024.
OLC’s Gideon, speaking to Namibian Sun, said she sympathises with the homeowners’ frustration.
“FNB made serious mistakes from the beginning, approving loans for land that lacked a subdivision certificate. These delays have caused us financial loss,” she said.
Gideon denied that the land was formally allocated to OLC by the council, claiming instead that the company acted in good faith to help the council generate revenue through end-user financing.
“As to when and how things changed, only the council can answer. They are using the agreement to deflect responsibility,” she added.
Frustrated homeowners, describing the situation as “inhumane”, spoke to Namibian Sun this week to share their grievances.
According to the affected residents, FNB Namibia began deducting monthly mortgage payments from their accounts in December 2024, despite the fact that they have not taken occupancy of the houses, which were built on unserviced land.
This has raised questions about how the bank approved loans for properties that do not meet basic development requirements.
Namibia’s land reform law prohibits the issuance of loans for homes built on unserviced land without an approved layout plan. Basic services – such as water, electricity and roads – must be in place.
Nicolas Richard, speaking on behalf of nine affected homeowners, said he and others are now struggling financially after the developer, OLC Properties CC, failed to deliver fully serviced houses. The company is represented by its chief operations officer, Megameno Gideon.
Located in Block 103, Okongo Proper, the homes were constructed in September 2023. While manholes were installed, Richard said water and electricity connections remain absent.
“We’ve been trying to get answers from the village council, FNB Namibia, OLC, and the Ministry of Urban and Rural Development – without success,” he said.
“They should tell us the truth. If they won’t, we’re taking this matter to the ombudsman. This is unacceptable. We can’t keep suffering like this,” Richard added.
Deteriorating homes
He questioned how the bank could release funds and issue title deeds, knowing the land lacked municipal services.
“This is like funding construction for a village house – something banks usually avoid. I live with my wife, five children, a nanny and her child. It’s too much for one income. My home loan is N$479 720, and I pay N$5 750 monthly, plus N$2 300 rent elsewhere.”
He added: “We’re not living in the houses, but the bank is deducting money. It’s painful. We were told we’d receive the keys once construction was complete – but now we’re stranded.”
A Namibian Sun visit to the area revealed that some of the newly built houses are already deteriorating, with cracks visible in doors and windows as well as leaking roofs.
“The bank should stop the deductions until the houses are connected to municipal services,” Richard said. “If not, they should refund us and sell the houses themselves.”
‘Misunderstanding’ between council and developer
Another homeowner, Costa Medusalem, received a loan of N$630 000 for a three-bedroom house. He now pays N$7 250 per month on the mortgage, plus N$2 000 rent.
In a letter dated 3 February 2025, FNB Namibia’s head of home loans, Susan-Ann Fick, told the clients that the standoff is between the local authority and the developer.
“A misunderstanding has emerged between OLC Properties and the Okongo Council regarding the provision of services. As a result, homeowners cannot occupy the properties due to the lack of municipal services,” the letter reads.
Namibian Sun has reviewed the memorandum of understanding (MoU) signed on 30 September 2022 between OLC Properties and the Okongo Village Council. The agreement required the developer to provide internal services for residential erven at its own cost.
The MoU also required OLC to extend the 11kVA Nored electricity network and construct two substations for low-voltage power supply.
Deal gone wrong
Former Okongo Village Council CEO, Immanuel Haikali – who signed the MoU – said the council was misled by the developer.
“The contractor made a U-turn and did not fulfil their obligations. We’ve since written to the Ministry of Urban and Rural Development for help and are working to secure funds to provide services.”
Haikali said a 90-day notice was given to the developer to comply, but after no response, the agreement was terminated. The developer then claimed the council should provide the services – contrary to the agreement.
He added that a tender for electrification was issued before he left office in January this year and only sewer piping remains incomplete, as manholes are already in place.
“The land was only partially serviced, and the developer was aware. They were supposed to install full services before construction,” Haikali said.
Responsibilities ‘deflected’
FNB Namibia’s communications manager, Kirsty Watermeyer, said the bank is working with all parties to resolve the matter. She explained that when the loans were approved, service installations were reportedly in progress and that a compliance certificate had been received from the village council.
Despite that, she confirmed that full deductions are ongoing even though the homeowners have not moved in. She added that mortgage deductions were delayed by one month in hopes the service issues would be resolved by December 2024.
OLC’s Gideon, speaking to Namibian Sun, said she sympathises with the homeowners’ frustration.
“FNB made serious mistakes from the beginning, approving loans for land that lacked a subdivision certificate. These delays have caused us financial loss,” she said.
Gideon denied that the land was formally allocated to OLC by the council, claiming instead that the company acted in good faith to help the council generate revenue through end-user financing.
“As to when and how things changed, only the council can answer. They are using the agreement to deflect responsibility,” she added.
Comments
Namibian Sun
No comments have been left on this article