The private sector, comprising corporations and individuals, secured N$4.50 billion in credit over the past twelve months, latest data reveals.
According to IJG Securities, corporations accounted for N$2.46 billion of the credit while individuals received N$2.04 billion.
This comes as in December 2024, private sector credit extension (PSCE) rose by N$810.2 million, which translates to a 0.7% m/m increase.
“Growth in PSCE for December 2024 rose to 4.0% y/y relative to a 3.3% y/y growth in November 2024. After accounting for the interbank swaps documented by the Bank of Namibia (BoN), the post-adjustment cumulative credit outstanding amounted to N$117.13 billion,” noted IJG.
According to Simonis Storm Securities, as of December 2024, Namibia’s total corporate debt stock stood at N$48.4 billion, marking a N$566.9 million increase from November.
“On a year-on-year basis, corporate credit grew 5.4%, driven by investment in infrastructure, technology, and capacity expansion,” Simonis Storm Securities said.
Credit extension to individuals increased by 3.06% year/year in December 2024, slightly lower than the 3.11% y/y increase in November 2024.
“Overdraft facilities for individuals remained unchanged in December 2024, while mortgage loans slightly rose by 0.8% y/y. Furthermore, credit installment rose by 10.6% y/y and other loans and advances increased by 8.2% y/y,” said IJG.
Meanwhile, credit extended to corporations peaked in December 2024 at 5.4% y/y, the highest annual growth recorded in 2024.
“This substantial growth can be attributed to the outperformance of two segments, the installment credit segment, which rose by 24.1% y/y, and the loans and advances segment, which rose by 3.0% y/y,” said IJG.
Furthermore, mortgage loans and overdraft lending remained in the negative, with an annual decline of 0.1% and 7.6%, respectively.
“Annual growth in PSCE reached a high of 4.0% y/y, the highest since August 2022. This growth was primarily driven by increased credit uptake by businesses,” noted IJG.
Notably, installment sales and leasing credit continued to increase due to demand from both corporations and individuals.
Simonis noted that this uptick was particularly evident in the mining and fishing sectors, where firms increasingly utilized debt for expansion and capital investment.
“The improved cost of financing amid a more accommodating credit environment likely contributed to this stronger corporate credit growth,” said the firm.
On the other hand, liquidity levels in the banking industry have shown persistent incremental increases, further supporting credit growth.
“Although overdraft lending remained negative, the modest improvement from November 2024 suggests that businesses are gradually settling their overdraft balances. These trends indicate a cautiously optimistic outlook, with business credit demand and stable liquidity levels supporting economic activity,” said IJG.
