By Fimanekeni Mbodo
Namibia’s financial system is modern, stable, and well-regulated. Our banks are highly profitable, our pension funds are the largest per capita in Africa, and our capital markets function reasonably well. On paper, this should place us ahead of many other economies.
Yet the structure of that financial system tells a different story. For the last decade, lending has been directed mainly to households rather than businesses, showing how comfortable our institutions have become financing consumption instead of production.
At the same time, large portions of bank liquidity and pension fund assets continue flowing into government securities to fund deficits, rather than supporting corporate growth.
The consequences are clear. A country that has lost more than 30,000 employers in five years and faces a broad unemployment rate of 55 percent cannot afford to starve its businesses of capital. If we want industries to grow and jobs to be created, Namibia needs more entrepreneurial thinkers in finance. People who can evaluate ideas, structure deals, assess risk beyond collateral, and design products that help real businesses grow.
A Credit System Built for Consumption
A quick look at private sector credit extension tells the story clearly. As of September 2025, individuals account for 58 percent of all private sector credit, while corporates make up the remaining 42 percent. This is the same ratio seen a decade earlier in September 2015, showing how little our financial system has evolved in directing capital towards productive, job-creating activities.
The type of credit extended to the private sector makes the picture even clearer.
Mortgage loans dominate the landscape, accounting for 49 percent of private sector credit by September 2025. Overdrafts and instalment credit make up 11 percent and 13 percent respectively, while Other Loans and Advances account for 27 percent.
While there is nothing wrong with helping Namibians achieve property ownership, the overwhelming dominance of mortgage lending exposes a lack of diversification and innovation in our banking sector. This dependency concentrates risk in one asset class and diverts capital away from the productive sectors that urgently need it to expand, employ and compete regionally.
Risk Aversion in a High-Unemployment Country
Namibia has one of the highest unemployment rates in the world. A country with this level of unemployment simply cannot afford a risk-averse financial system that limits capital to only those who already have assets. Yet this is exactly how our system is structured.
SMEs in Namibia contribute significantly to employment yet receive only a fraction of available credit. Namibia’s informal sector employs 58% of the country’s workforce and receives next to nothing in credit. Most SMEs cannot meet collateral requirements because they lack property titles and tangible assets. Their biggest assets are their ideas, business models, and current and future cash flows. Our financial system has never been designed to evaluate these.
Non-performing loan ratios in Namibia are consistently low, and bank profitability remains extremely strong. Liquidity ratios consistently show a healthy buffer above the statutory requirement, indicating that banks have capital they could deploy into more innovative or growth-oriented lending. The problem is not a lack of capacity; it is a lack of entrepreneurial thinking and decision-making.
What Entrepreneurial Thinking in Finance Looks Like
Entrepreneurial thinking in finance does not mean reckless lending. It means building the ability to assess non-traditional risks, creating lending teams that understand sectors like agriculture, technology, manufacturing and tourism, and partnering with entrepreneurs through capital and flexible structures.
It also means product innovation. Namibia needs revenue-based financing, venture debt and sector-focused funds that support growth industries. These tools exist elsewhere because financiers in those countries made deliberate choices to pursue growth, develop new capabilities and support the sectors that drive national development.
Namibia’s challenge is not a lack of ideas or capital, but a lack of financial imagination.
Our economy needs decision makers who think like builders and unlock capital for businesses, not only households. This shift requires leadership from CEOs, boards, regulators and development finance institutions who must prioritise innovation and enterprise. Given our stagnant credit growth and rising pressures, the message is simple: if you do not have the appetite for calculated risk, you should not be in finance.
*Fimanekeni Mbodo is an Entrepreneur and Independent Financial Analyst. He has a strong background in Finance and Business, with a BCom in Financial Accounting from the University of Cape Town and a Postgraduate Diploma in Business Administration from the University of Namibia.
