Namibia’s corporate credit surged to N$46.5 billion in January 2024, marking a 2.1% increase compared to the previous year, surpassing December 2023’s 0.4% expansion, signaling changing trends in corporate lending, latest data shows.
According to the Bank of Namibia, the credit growth in the corporate sector was primarily driven by increased demand from manufacturing, energy, and agriculture sectors.
The latest data from Simonis Storm highlights that, in January 2024, the growth of private sector credit extension was 2.4% year-on-year (y/y), a slight decrease from the 2.6% y/y recorded in January 2023, but an improvement from the 1.9% y/y observed in December 2023.
Simonis Storm Researcher Halleluya Ndimulunde said the growth in January 2024 was supported by the corporate sector while household credit extension moderated.
“Conversely, households experienced a slowdown in credit growth during the same period, with growth decreasing to 2.6% y/y in January 2024 from 3.0% y/y in December 2023.,” she said.
Ndimulunde added that despite the typical trend of individuals seeking loans to kick-start the year, January 2024 saw the slowest credit growth uptake by households since 2021.
Additionally, credit extended to non-residents increased to 5.0% y/y in January 2024 from 3.6% y/y in December 2023, reaching a debt stock of N$7.9 billion.
“Digging deeper into the credit extension categories for both corporates and households, we saw that the corporate credit growth of 2.1% y/y was primarily driven by the installment and leasing category, which rose to 24.3% y/y in January 2024 from 21.6% y/y reported in December 2023,” she explained.
Similarly, overdrafts, other loans and advances also showed growth trajectories, although mortgage loans showed improvement, they remained in negative territory, with negative growth of -1.7% y/y in January 2024 from -4.4% y/y in December 2023.
As for household credit growth of 2.6% y/y, the slowdown can be attributed to sluggish demand for mortgage loans, which decreased to 2.2% y/y in January 2024 from 2.7% y/y in December 2023.
“Other loans and advances contracted to 1.1% y/y in January 2024 from a growth of 0.2% y/y in December 2023. However, overdrafts experienced positive growth of 19.2% y/y in January 2024,” she said.
As of the end of January 2024, the liquidity position of the banking industry declined to N$6.2 billion from the N$7.7 billion recorded in December 2023.
The central bank assured that the decrease in market liquidity levels was seasonal, as levels typically experience a dip during the first month of the year.
