Namibian households are increasingly relying on overdraft facilities to cope with rising living costs, with overdraft borrowing more than doubling in June as inflation and tighter household budgets continued to weigh on consumers.
According to FNB Namibia’s June Private Sector Credit Extension (PSCE) report, household credit growth accelerated to 4.5% year-on-year from 4.2% in May, driven largely by a sharp increase in overdraft borrowing, which rose from 5.8% year-on-year in May to 12.5% in June.
“The credit environment remained broadly stable in June 2026, showing a modest improvement despite heightened economic uncertainty. Private sector credit extension increased by 1.1% month-on-month, while annual growth strengthened to 4.5% year-on-year from 4.3% in May,” the report said.
Overall private sector credit expanded by 1.1% month-on-month and 4.5% year-on-year, supported by stronger borrowing from both households and businesses.
Corporate credit growth edged up to 4.5% year-on-year from 4.4% in May, driven by increased demand for specialised loans and advances from the mining, energy, wholesale and retail, and financial services sectors.
FNB said growth in other loans and advances recovered to 2.5% year-on-year in June after contracting by 2.4% in May, reflecting renewed borrowing by companies in key sectors of the economy.
Despite stronger consumer borrowing, mortgage lending remained subdued. Property loans increased by just 1.4% year-on-year, with household mortgage growth edging up to 2.1%, while corporate property lending contracted by 1.1% as elevated interest rates continued to discourage long-term investment.
Instalment sales and leasing finance remained the fastest-growing lending category, expanding by 19.2% year-on-year, supported by continued demand for commercial vehicles and equipment.
In contrast to households, businesses reduced their dependence on short-term borrowing, with corporate overdraft growth slowing to 2.2% year-on-year as companies in the mining, construction and retail sectors repaid short-term debt.
The report also noted that annual inflation accelerated to 4.4% in June, driven mainly by higher transport and food prices, adding further pressure to household finances.
Meanwhile, Namibia’s foreign exchange reserves stood at N$56.4 billion at the end of June, providing import cover of 3.5 months and continuing to support the Namibia dollar’s one-to-one peg with the South African rand.
