Corporate borrowing in Namibia rose sharply in June 2025, with total corporate debt stock reaching N$50.88 billion, supported by a net increase of N$802 million during the month, according to Simonis Storm Junior Economist Almandro Jansen.
Jansen said corporate credit growth accelerated to 10.6% year-on-year in June, the fastest pace recorded in over five years.
“The data signals a broad-based recovery in business sentiment and points to a shift toward more strategic, investment-led credit utilization,” he said.
Overdraft facilities were the primary driver of this growth, expanding by 29.5% year-on-year, up from 12.1% in May.
Jansen attributed this to increased borrowing by real estate developers for land and property acquisitions, as well as manufacturers scaling up production to meet growing demand.
“Instalment and leasing credit also remained a key pillar of growth, increasing by 19.9% year-on-year, compared to 13.1% in May,” he said.
Credit extended through other loans and advances grew by 9.8%, which Jansen said reflects improved long-term financial planning among businesses.
“As cash flow visibility improves, more firms are transitioning away from pure liquidity management toward structured borrowing aligned with multi-year investment goals,” he said.
However, mortgage lending to corporates declined by 0.2% year-on-year, pointing to a cautious approach to commercial property investments.
“Corporate deleveraging in this segment also indicates a more cautious approach to long-duration real estate exposure,” Jansen explained, citing elevated construction costs, changing workspace needs, and delays in large-scale developments as contributing factors.
Jansen noted a broader shift in the composition of corporate borrowing, with firms now focusing on productive, asset-backed, and expansion-led credit.
“This indicates a deliberate alignment of financing with operational priorities rather than opportunistic borrowing,” he said.
With the Bank of Namibia’s policy rate steady at 6.75% and the prospect of a further 25 basis point cut in the second half of the year, Jansen said monetary conditions remain favourable for continued business lending.
“Borrowing behaviour appears more intentional and disciplined, pointing to an investment cycle driven not by loose credit, but by measured optimism and forward-looking planning,” he said.
Private sector credit extension (PSCE) rose to 5.7% year-on-year in June, up from 4.1% in May, the fastest pace since early 2020. According to Jansen, the current credit momentum is being led by corporates rather than households.
In contrast, household credit growth remained subdued, rising by 2.4% year-on-year in June, down slightly from 2.5% the previous month. Mortgage lending declined by 0.3%, marking the third consecutive monthly contraction.
“Household credit growth eased to 2.4% year-on-year in June 2025, down slightly from 2.5% in May, marking the slowest pace this year. Although the stock of household debt rose by N$205 million month-on-month to reach N$69.3 billion, the trend continues to reflect a cautious and income-constrained consumer landscape,” Jansen noted.
