Vehicle financing remained the fastest-growing major credit category in Namibia in August, with instalment and leasing credit increasing by 18.7% year-on-year, as demand for financed vehicles continued to support lending growth.
According to FNB’s August Private Sector Credit Extension (PSCE) report, growth was particularly strong among businesses, where instalment and leasing finance increased by 22.6% year-on-year.
FNB said the performance was supported by a 12.9% increase in vehicle sales, pointing to continued demand for financing to purchase vehicles and other assets.
The strong performance in vehicle finance contributed to an acceleration in overall private sector credit growth, which increased to 5.4% year-on-year in August from 4.2% in July.
Business borrowing was the main driver of the broader increase, with corporate credit growth accelerating to 5.9% from 3.7%. Household credit growth also strengthened to 4.9% from 4.6%.
Businesses also increased their use of overdrafts, with corporate overdraft credit growth jumping to 7.1% from 0.8% in July.
The increase was driven by businesses in the real estate, mining, retail, fishing, transport and logistics, and services sectors.
“Overdraft lending surged to 7.1% year-on-year in August from 0.8% in the previous month, supported by increased borrowing from businesses operating in the real estate, mining, retail, fishing, transport and logistics, and services sectors,” FNB said.
Other loans and advances to businesses also accelerated to 4.2% from 1.4%, mainly due to increased borrowing in the manufacturing and transport and logistics sectors.
Mortgage lending remained relatively subdued, although growth improved slightly to 1.9% from 1.6% in July.
Overall private sector credit expanded by 1.1% month-on-month in August, with FNB saying the stronger lending figures reflected improving demand for credit across businesses and households.
The bank expects corporate borrowing to remain resilient, particularly in mining, energy, logistics and infrastructure-related activities.
