Namibia’s total private sector credit extension amounted to N$113.60 billion in June, representing a decline of N$732.6 million from May, data from IJG Securities reveals.
However, compared to the same period last year, private sector credit extension has increased by N$2.02 billion, reflecting a 1.81% year-over-year growth.
The breakdown reveals that individuals hold an outstanding credit of N$67.59 billion, while corporates account for N$46.02 billion.
IJG said the normalised cumulative credit outstanding amounted to N$113.6 billion (removing the interbank swaps of the Bank of Namibia accounts for non-resident private sector claims).
“A net amount of N$732.6 million was repaid to creditors during June, driven by a net repayment of N$1.0 billion by business, which was partially offset by individuals borrowing a net amount of N$285.3 million,” said IJG.
The outstanding amount for corporates decreased by N$1.02 billion from the previous month, resulting in a 2.16% decline, but showed an increase of N$241.0 million over the past year, reflecting a 0.53% rise.
Meanwhile, individuals saw an uptick of N$285.3 million month-over-month, a 0.42% increase, and a N$1.77 billion year-over-year increase, translating to a 2.70% growth.
IJG reports that mortgage loans experienced a modest monthly increase of N$217.4 million, or 0.37%, and a yearly rise of N$371.8 million, equating to a 0.63% growth.
“Elevated interest rates have diminished the demand for mortgage loans, as businesses were net repayors of mortgage loans for the 21st consecutive month and individuals remained net borrowers, but at a very low level,” said IJG.
Other loans and advances decreased by N$288.6 million, or 0.93%, from the previous month but showed a substantial annual increase of N$2.37 billion, representing an 8.40% growth.
“Repayments made by the fishing industry drove the lower growth rate, but other industries remain net borrowers of other loans and advances, while individuals minimally drove growth,” said IJG.
Overdrafts declined sharply by N$770.1 million month-over-month, a 6.75% drop, and by N$2.43 billion year-over-year, marking an 18.62% decrease.
“This is the largest decline in this credit type since 2005 and the 5th consecutive month that the credit type contracted. Repayments by businesses in the commercial and services sector and the manufacturing sector drove overdraft lending down,” said IJG.
Meanwhile, instalment credit rose by N$108.6 million from the previous month, a 0.84% increase, and by N$1.70 billion over the past year, a 14.98% rise.
“The growth of the tourism sector benefits instalment credit extension as rental companies are buying vehicles to meet volumes demanded,” said IJG.
