The private sector in Namibia received a total of N$3.73 billion in credit over the past 12 months, with individuals accounting for N$2.07 billion and corporations securing N$1.66 billion, according to the latest data.
IJG Securities says that private sector credit extension (PSCE) rose by 0.8% m/m in November 2024, equivalent to N$908.8 million. This brought the annual growth rate down to 3.3%.
“After adjusting for interbank swaps recorded by the Bank of Namibia (BoN) under non-resident private sector claims, the normalised cumulative credit outstanding stood at N$116.3 billion,” said IJG.
Credit extended to individuals increased by 3.1% y/y in November. Overdraft facilities for individuals recorded a 0.4% y/y increase, while mortgage loans rose modestly by 1.0% y/y.
“Other loans and advances, including credit cards, personal loans, and term loans saw an 8.0% y/y rise. However, the growth rate of instalment credit slowed to 9.7% y/y,” said the firm.
Meanwhile, credit extended to corporates slowed in November, with annual growth easing to 3.6% y/y compared to 4.4% y/y in October.
“The deceleration was primarily driven by reduced credit demand from companies in the real estate sector. Corporate overdrafts continued to contract, posting an 8.8% y/y decline, while mortgage loans fell by 3.9% y/y,” noted IJG.
In contrast, other loans and advances increased by 11.9% y/y, and instalment credit registered another substantial rise of 21.3% y/y.
The firm noted that the subdued growth in corporate credit highlights the continued muted demand for credit within this sector.
This comes as commercial banks’ overall liquidity increased by N$1.48 billion in November, averaging N$8.14 billion compared to N$6.65 billion in October.
Higher diamond sales primarily drove the increase during the month.
On the other hand, in November, international reserves fell by N$45.0 million, reaching N$60.83 billion. This level continues to provide 4.1 months of import cover, unchanged from the previous month.
“The BoN attributed the decline mainly to higher net outflows from commercial banks, partially offset by increased customer foreign currency placements, leading to a slight drop in the reserve stock,” said IJG.
