Namibians are taking fewer loans from microlenders, but the amount borrowed by each individual is increasing.
According to the latest quarterly report from the Namibia Financial Institutions Supervisory Authority (Namfisa), the average term loan increased to N$25 620 during the first quarter of 2026, while the average payday loan rose to N$4 030.
Payday loans are loans that are paid off in one month, while term loans are usually paid over a specified time.
In the first three months of the year, Namibians borrowed N$927.8 million.
LOAN INDUSTRY FEELS PRESSURE
The report shows that the country’s microlending loan book decreased by 3% between January and March, falling to N$7.3 billion.
The decline was mainly linked to a reduction in term loans, which are usually larger loans.
Namfisa says the sector was still recovering from disruptions caused by changes around the Payroll Deduction Management System (PDMS), which affected lending to government employees.
“The microlending sector’s aggregate loan book declined by 3.0% quarter on quarter to N$7.3 billion at the end of the first quarter of 2026,” Namfisa says.
However, the amount of money paid out through loans increased.
Namfisa says this improvement was mainly driven by a rebound in term lending after a major lender resumed issuing loans following a temporary suspension.
“The increase recorded during the review period largely represents a normalisation of lending transactions within the term-lending category,” Namfisa says.
Despite the recovery, the authority warns that lending activity has not yet returned to levels seen before the PDMS-related disruptions.
“The overall disbursement levels remained below those recorded prior to the PDMS-related disruptions, suggesting that the sector is still adjusting to the evolving operating environment,” the report says.
FEWER BORROWERS, BUT HIGH DEMAND
The number of Namibians using microlenders also declined slightly during the quarter.
Namfisa recorded 274 732 household borrowers by the end of March, a decrease of 1.7% compared to the previous quarter.
However, compared to the same period last year, more people were still using microlending services, with borrower numbers up by 6%.
This suggests while fewer people took loans in the first quarter, the need for short-term credit remains strong among households facing financial pressures.
“Despite the quarterly decline, the number of borrowers remained 6.0% higher than in the corresponding quarter of 2025, indicating that demand for microlending products remains elevated relative to a year ago,” Namfisa reports.
Term loans remained the preferred option for most borrowers, making up 58% of all microlending clients, while payday loans accounted for 42%.
The number of new loans issued also declined, dropping by 7% to 175 018 loans during the quarter.
Payday loans continued to dominate new lending activity, making up 94% of all new loans issued.
COMPANIES DOMINATING
While thousands of Namibians rely on microlenders, the industry itself remains controlled by a small number of companies.
In the payday lending market, Express Credit Cash Advance remained the biggest player, controlling about 68.5% of the market.
Janeel Financial Services held 5.9%, while Pause Financial Services accounted for 3.2%.
Together, these three lenders controlled more than 70% of Namibia’s payday loan market.
The same trend was seen in term lending, where three major companies dominated the sector.
Letshego Micro Financial Services held the largest share at 28.8%, followed closely by Entrepo Finance at 28.1%.
Old Mutual Finance remained the third-largest lender with 22.3%.
Together, the three companies controlled nearly 80% of the term-lending market.
