Overdrafts offer January lifeline

Namibian household credit growth rose to 3% in January, driven by a rebound in overdraft demand despite an overall slowdown in private sector credit.

This was a 1.4% year-on-year (y/y) increase, reflecting post-holiday financial strain, compounded by weak wage growth and constrained household purchasing power.

According to FNB Namibia analyst Ndateelela Amukuhu, household credit growth gained further momentum, rising to 3.0% y/y in January from 2.7% y/y in December.

This is despite the private sector credit extension (PSCE) growth having eased to 4.2% y/y in January, from 4.4% y/y recorded in December 2025.

“This reflects a softer start to the year, despite remaining slightly above the 4.1% y/y growth observed in January 2025,” Amakuhu says, adding that this slowdown was primarily driven by a deceleration in corporate credit demand, which fell by one percentage point to 5.8% y/y in January.

The analyst says overdraft lending accelerated across credit categories to 7.2% y/y in January from 4.3% y/y the month before, marking a rebound after six consecutive months of contraction.

“The recovery was mainly driven by stronger household demand, while corporate uptake remained subdued due to ongoing repayments,” Amakuhu says.

He says growth in the other loans and advances category slowed to 4.7% y/y in January from 6.6% y/y a month earlier, due to weaker borrowing appetite from both households and corporates.

Mortgage credit demand remained subdued, posting marginal growth of 0.1% y/y in January, primarily driven by a slight uptake in household borrowing.

“This marks an improvement from the -0.1% y/y contraction recorded in December. Nonetheless, activity in this category remains constrained by persistent structural challenges in the housing market, which continue to limit new mortgage uptake and weigh on overall PSCE growth,” the analyst says.

Additionally, instalment sale and leasing credit, though still the fastest-growing category, eased to 17.4% y/y in January from 18.5% y/y a month ago.

“Strong vehicle sales continued to support growth across both households and corporates. Total vehicle sales, however, declined by 11% month on month (m/m) to 1 005 units in January, reflecting a typical seasonal dip.”

Amakuhu says household credit growth showed a modest improvement at the start of the year, rising to 3.0% y/y in January from 2.7% y/y in December, marking a 0.4 percentage point increase compared to a year earlier.

The uptick was mainly supported by stronger demand for overdraft facilities and mortgage credit, while growth across the remaining credit categories remained generally subdued.

Mortgage credit also continued its gradual recovery, posting a second consecutive month of growth and edging up to 0.3% y/y in January from 0.2% y/y previously.
– email: matthew@namibian.com.na

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