Corporate borrowing remained the strongest driver of overall credit growth in October, but momentum continued to moderate for the second consecutive month, easing to 7.3% year on year (y/y) from 9.5% previously.
This is contained in First National Bank (FNB) Namibia’s October private sector credit extension (PSCE) report.
FNB attributed the slowdown mainly to softer uptake of other loans and advances, which fell to 8.1% y/y as businesses in the mining, manufacturing and fishing sectors recorded net repayments.
Overdraft utilisation also declined to 13.9% y/y, a move the bank says reflects corporates taking advantage of the lower interest-rate environment to reduce short-term debt.
“Similarly, overdrafts declined further for a fourth consecutive month to 13.9% y/y in October from 16.8% y/y.
This trend likely indicates that corporates are taking advantage of the low-interest environment amid market uncertainties following the recent reduction in the repo rate,” the report states.
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