Private sector credit disbursements amounted to N$1.44 billion over the past 12 months, marking a 65.7% decrease from the N$4.21 billion issued in the prior comparable period, official figures show.
According to IJG Securities, normalised cumulative credit outstanding amounted to N$112.7 billion (removing the interbank swaps the Bank of Namibia (BoN) accounts for non-resident private sector claims).
IJG said N$478.5 million worth of private sector debt was repaid during March, driven by both businesses and households.
This comes as private sector credit fell by 0.42% m/m in March, translating to subdued annual growth of 1.30%, the lowest annual growth in outstanding loans since December 2021.
According to the BoN, credit appetite sharply declined for businesses (down 97.0% in the past 12 months compared to the previous year) and households (down 57.9% over the same period).
Meanwhile, credit extended to individuals grew by 2.17% y/y in March, slowing from the 2.44% y/y growth rate recorded in February. Total credit extended to individuals stood at N$66.8 billion at the end of March.
“The year-on-year growth was driven by mortgage loans (contributing 1.2pp), overdrafts (0.6 pp) and instalment and leasing credit (0.6 pp), while other loans and advances had an adverse impact on credit growth (-0.3 pp),” said IJG.
Overdraft facilities dropped by 1.3% monthly but rose by 16.3% annually. Leasing and instalment credit declined by 0.3% monthly but increased by 5.9% year-on-year.
“Mortgage loans and ‘other loans and advances’ remained steady month-on-month, with mortgage loans up by 1.8% annually while ‘other loans and advances’ fell by 1.5% year-on-year,” the firm said.
Credit extended to corporates saw a minimal year-on-year growth of 0.06%, contrasting with the 0.57% growth in February as businesses held a total credit of N$45.8 billion by the end of March.
Instalment and leasing credit boosted annual corporate credit growth by 2.2 percentage points, while ‘other loans and advances’ contributed 0.2 points positively.
Conversely, mortgage loans (-1.3 points) and overdrafts (-1.1 points) hindered credit growth.
“Leasing and instalment credit continues to drive corporate credit extension, with the category registering a growth of 2.0% m/m and 22.9% y/y. All other categories contracted month-on-month, with ‘other loans and advances’ declining by 1.1% m/m, but up 0.6% y/y, while overdrafts fell by 0.9% m/m and 4.7% y/y. Mortgage loans meanwhile fell by 1.7% m/m and 4.0% y/y,” IJG reported.
