• Contact Us
  • About Us
  • Advertisement
  • Privacy & Policy
Friday, June 13, 2025
SUBSCRIBE
The Brief | Namibia's Leading Business & Financial News
26 °c
Windhoek
22 ° Wed
25 ° Thu
  • Home
  • Companies
    • Finance
    • Agriculture
    • Technology
    • Property
    • Trade
    • Tourism
  • Business & Economy
  • Mining & Energy
  • Opinions
    • Analysis
    • Columnists
  • Africa
  • e-edition
No Result
View All Result
The Brief | Namibia's Leading Business & Financial News
  • Home
  • Companies
    • Finance
    • Agriculture
    • Technology
    • Property
    • Trade
    • Tourism
  • Business & Economy
  • Mining & Energy
  • Opinions
    • Analysis
    • Columnists
  • Africa
  • e-edition
No Result
View All Result
The Brief | Namibia's Leading Business & Financial News
Subscribe
No Result
View All Result
TB image banner 750x140
Home Companies Finance

High interest rates to dampen demand for credit

by editor
September 1, 2022
in Finance
47
A A
57
SHARES
953
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

You might also like

Currency in circulation rises to N$5.6 billion, counterfeiting drops by 10.7%

Ester Kali named CEO of the year as Letshego scoops three global awards

Women representation lagging in financial sector

Rising interest rates are likely to discourage households from borrowing in the short-to-medium term due a challenging environment as expensive living costs combined with tighter monetary policy during 2022 add to budgetary pressures, economic advisory firm Simonis Storm has warned.

Higher interest rates increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending.

The research firm added that average monthly credit growth is expected to be around 3.6% given that the fourth quarter will be coming off a low base where credit growth averaged only 1.9% in 4Q2021.

“We expect another 100bps hike in the repo rate before the end of 2022, which would lift the prime rate from 9.25% to 10.25%,” said Simonis Storm.

This was after credit extended to the private sector grew by 4.0% y/y in July, compared to 3.4% y/y in June. Net household debt increased by 2.1% y/y in July compared to 2.0% y/y in the prior month, whereas net corporate debt increased by 6.5% y/y in July compared to 5.3% y/y in the prior month.

Corporate credit growth was supported by higher demand from businesses in the transport, mining, health and services sectors according to Bank of Namibia (BoN).

YTD, 2022 has recorded the worst annual growth rates in household credit, whereas the year has been better than recent years for corporate credit.

Improved credit growth in 2022 stems mainly from corporate credit growth. YTD credit extension averages 3.3% compared to 2.4% in 2021.

“Disaggregating the data, we see that household credit growth was mainly driven by other loans and advances up 7.9% y/y in July 2022 and mortgages rising 1.9% y/y in July 2022 which collectively account for 86.1% of household credit growth.

“Accounting for 45.8% of corporate credit growth, other loans and advances up 15.7% y/y in July 2022 and installment and leasing rising 14.9% y/y in July 2022 were the main drivers of growth in corporate credit.”

Overdrafts for both households and corporates dropped 10.7% and 6.1% respectively y/y in July 2022.

Last year, net investment was focused on the mining (32.3%), financial services (17.6%), manufacturing (15.9%), service providers of government (14.4%) and agriculture (7.9%) sectors of the economy.

In addition, most of the net investments in 2021 were spent on machinery and equipment (34.7%), buildings (24.5%) and construction works (18.0%).

Whereas excess credit growth above GDP growth indicates most loans were used for consumption purposes, excess gross fixed capital formation (GFCF) growth above GDP growth could potentially indicate that an inefficient allocation of resources has largely been taking place.

This is due to net investment not translating into higher economic growth rates over the last 10 years. Indeed, GFCF averaged annual growth of 20.4% but GDP only averaged 7.4% between 2011 and 2021.

author avatar
editor
See Full Bio
Tags: finance
Share23Tweet14Share4
Previous Post

Botswana awards first large-scale solar contract to Scatec

Next Post

Cleanergy targets Walvis Bay with hydrogen

Recommended For You

Currency in circulation rises to N$5.6 billion, counterfeiting drops by 10.7%

by reporter
May 12, 2025
0
Currency in circulation rises to N$5.6 billion, counterfeiting drops by 10.7%

The Bank of Namibia has revealed that currency in circulation in Namibia has increased by 6.9% in 2024, climbing from N$5.2 billion in 2023 to N$5.6 billion. Bank...

Read moreDetails

Ester Kali named CEO of the year as Letshego scoops three global awards

by reporter
May 12, 2025
0
Ester Kali named CEO of the year as Letshego scoops three global awards

Namibian business leader Dr Ester Kali has been named Banking CEO of the Year – Namibia 2024 at the Global Banking & Finance Awards, with Letshego Holdings Namibia...

Read moreDetails

Women representation lagging in financial sector

by reporter
May 9, 2025
0
Women representation lagging in financial sector

Executive for corporate affairs at Hollard Namibia and Chairperson of the Namibia Women in Finance and Insurance (NamWifi) Council Grace Mohamed says the financial sector is lagging behind...

Read moreDetails

Marsorry Ickua appointed Head of Bank of Namibia’s instant payments subsidiary

by reporter
May 9, 2025
0
Marsorry Ickua appointed Head of Bank of Namibia’s instant payments subsidiary

Marsorry Ickua has been appointed Head of the Bank of Namibia’s subsidiary, Instant Payments Namibia (IPN), on secondment He previously served as Director of IT at the central...

Read moreDetails

Windhoek Country Club pays N$25 million dividend

by reporter
May 9, 2025
0
Windhoek Country Club pays N$25 million dividend

The Windhoek Country Club Resort and Casino (WCCR) has announced a N$25 million dividend payout to the government for the 2023/24 financial year during a handover ceremony, marking...

Read moreDetails
Next Post
Cleanergy targets Walvis Bay with hydrogen

Cleanergy targets Walvis Bay with hydrogen

Related News

Bank Windhoek appoints Sabatha as Head of Brand Marketing

Bank Windhoek appoints Sabatha as Head of Brand Marketing

November 23, 2023
Govt ropes in experts for synthetic fuels bill formulation

Govt ropes in experts for synthetic fuels bill formulation

July 6, 2023
NDTC empowers 300+ Namibian entrepreneurs

NDTC empowers 300+ Namibian entrepreneurs

April 25, 2024

Browse by Category

  • Africa
  • Agriculture
  • Analysis
  • Business & Economy
  • Columnists
  • Companies
  • Finance
  • Finance
  • Fisheries
  • Green Hydrogen
  • Health
  • Investing
  • Latest
  • Market
  • Mining & Energy
  • Namibia
  • News
  • Opinions
  • Property
  • Retail
  • Technology
  • Tourism
  • Trade
The Brief | Namibia's Leading Business & Financial News

The Brief is Namibia's leading daily business, finance and economic news publication.

CATEGORIES

  • Business & Economy
  • Companies
    • Agriculture
    • Finance
    • Fisheries
    • Health
    • Property
    • Retail
    • Technology
    • Tourism
    • Trade
  • Finance
  • Green Hydrogen
  • Investing
  • Latest
  • Market
  • Mining & Energy
  • News
    • Africa
    • Namibia
  • Opinions
    • Analysis
    • Columnists

CONTACT US

Cell: +264814612969

Email: newsdesk@thebrief.com.na

© 2025 The Brief | All Rights Reserved. Namibian Business News, Current Affairs, Analysis and Commentary

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • Home
  • Companies
  • Mining & Energy
  • Business & Economy
  • Opinions
    • Analysis
    • Columnists
  • Africa

© 2025 The Brief | All Rights Reserved. Namibian Business News, Current Affairs, Analysis and Commentary

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.