Still owed N$7.5 billion
Microlenders lost about N$200 million in three months after the Ministry of Finance announced the discontinuation of the Payroll Deduction Management System (PDMS).
This brought the total amount owed by Namibians to cash loans from N$7.8 billion to N$7.5 billion.
According to the latest industry figures by the Namibia Financial Institutions Supervisory Authority (Namfisa), in the last quarter of 2025 (November to December) the microlending sector recorded a 3% quarterly decline and a 6.5% yearly decline.
The report says the primary driver behind the shrinking debt pool is the term-lending category, which saw its loan book decrease by 4.1%.
This decline is directly linked to the PDMS policy shift from the Ministry of Finance.
“This contraction is largely attributable to the directive issued by the Ministry of Finance to discontinue the PDMS, which significantly affected lending transactions among term lenders,” says Namfisa.
The impact of the PDMS discontinuation was most visible in disbursements, which decreased by 73.5% for term lenders.
This regulatory change essentially altered how loans are repaid through employer payrolls.
The battle of PDMS started last August, when the ministry ordered the end of discretionary payroll deductions by 30 November.
Entrépo challenged the move as “irrational”, arguing it would cripple the industry.
While a November court order directed the ministry to keep the system operational, Entrépo returned to court in December, alleging it was locked out of the system and that 70 000 deductions remained unprocessed.
Judge Lotta Ambunda dismissed Entrépo’s urgent application with costs.
The court found insufficient evidence that the ministry had intentionally disabled the system, noting that “inadequacy in the system does not mean there is no fully functional maintenance”.
Shifts in Borrowing Behaviour
Despite the decline in total debt value, the number of individual borrowers increased to 279 594, which is a 16.3% increase compared to the same period in 2024.
While long-term borrowing declined, payday lenders saw an 11% increase in activity.
The average payday loan value rose to N$3 906 monthly. Meanwhile, the average term loan value dropped by 29.2% to N$23 495.
In the term-lending space, Entrépo Finance leads with 29.5% of the portfolio, followed neck-and-neck by Letshego Micro Financial Services at 29.4% and Old Mutual Finance at 21.6%.
The payday loan market is even more centralised and is dominated by Express Credit Cash Advance, accounting for a 69% market share.
It is followed by Janeel Financial Services at a 6% market share and Pause Financial Services at a 3% market share.
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