Namibia’s household credit amounted to N$67 billion in April 2024, commanding 55% of total private sector credit, data from Simonis Storm reveals.
During the month, corporate credit stood at N$46.3 billion, representing 38%, while non-resident credit reached N$7.8 billion, comprising 7% of the total.
The firm’s researcher Halleluya Ndimulunde noted that credit extended to the private sector remains subdued, falling below the six-month moving average and is the second lowest rate recorded in 2024.
“When credit growth falls below the six-month moving average, it signals a deceleration in the pace of credit expansion relative to recent periods. This slowdown may reflect cautious borrowing behaviour by both households and corporations, potentially influenced by broader economic conditions such as high interest rates and economic uncertainty,” she said.
In April 2024, private sector credit extension experienced a modest growth of 1.6% y/y, a slight improvement from the 1.3% y/y recorded in March 2024, but a significant decline from the 2.5% y/y growth seen in April 2023.
Year-to-date, annual credit growth has averaged 1.8%, compared to 3.1% for the same period last year, indicating only gradual improvement during the initial months of the year.
Ndimulunde said the slight increase in credit extended during April 2024 can be attributed to corporate sector activity.
Meanwhile, the slower growth in credit uptake in April was offset by stagnant household credit, which remained steady at 2.2% y/y compared to the previous month but was down from 5.0% y/y in April 2023.
“Households were net repayers of other loans and advances, which saw a negative growth of 1.4% y/y in April 2024. However, they continued to be net borrowers in other areas, including mortgage loans (1.6%y/y), overdrafts (19.8% y/y), and instalment and leasing (6.6% y/y),” said Ndimulunde.
Meanwhile, credit uptake by the corporate sector increased to 0.6% y/y in April 2024, up from 0.1% y/y in the previous month and significantly better than the -0.8% y/y recorded in April 2023.
The primary drivers of credit extended to corporates were other loans and advances, which saw an increase of 8.3% y/y in April 2024, compared to 0.6% y/y in March 2024.
“Instalment and leasing loans experienced substantial growth of 26.4% y/y in April 2024, driven by the tourism industry, particularly the automotive sector. In contrast, other loan categories experienced negative growth, with mortgage loans declining by 2.1% y/y and overdrafts decreasing by 16.0% y/y,” said the researcher.
