Namibia’s cash loans owed N$8.1 billion

As at the end of 2024, cash loan businesses in the country were owed N$8.1 billion.

This is according to the quarterly report of the Namibia Financial Institutions Supervisory Authority (Namfisa), which regulates the non-banking financial sector.

The report says the loan book value for microlenders was N$8.1 billion, divided amongst 796.

This was an increase of 12.8%.

“Term lender loans, which constituted 94% of the total loan book, grew by 10.7% quarterly to N$7.6 billion,” the report reads.

Of this amount, N$1.3 billion has been recorded to be arrears, meaning Namibians are defaulting on payments.

“Total arrears declined both quarterly and annually to N$1.3 billion by the end of the year under review,” the report says.

Term borrowers’ total arrears amounted to N$1.2 billion.

Meanwhile, payday borrowers’ arrears totalled N$109.0 million, with arrears of 22%, representing 78% of payments due.

The total number of borrowers was 240 475, an increase from money borrowed by 221 841 people from microlenders in 2023.

“The total number of household borrowers participating in microlending transactions decreased by 2.3% quarter on quarter, but increased by the end of the fourth quarter of 2024,” the report states.

In the previous financial year, the amount borrowed was N$7.2 billion.

However, Namibians are still not taking up loans in the banking sector, although interest rates have decreased, with home loan uptake remaining flat at 0.3% at the beginning of the year.

This was according to Simonis Storm Securities’ data on January private sector extensions.

Credit growth for January remained weak at 2.6% when compared to 3.1% in December, the analysts say.

According to the latest Bank of Namibia annual report, Namibian banks extended loans to the value of N$118.9 billion in 2024.

However, N$6.6 billion is now written off as bad debt, a consequence of clients struggling to repay their loans.

“Non-performing loans increased by N$96.3 million to N$6.6 billion in 2024 due to unfavourable economic conditions characterised by high interest rates, high inflation, and unemployment, which impacted the ability of households and businesses to service their debts,” the central bank’s annual report reads.