Private sector borrowing reaches N$123b

NAMIBIANS borrowed slightly more in March than in February, raising the total outstanding credit for the month to N$123.34 billion.

According to an analysis by IJG Securities, private sector credit rose marginally in March by N$158.4 million or 0.1% month on month (m/m) and 4.3% year on year (y/y).

“Over the past 12 months, the private sector borrowed a total of N$5.03 billion, with corporate entities taking up N$2.18 billion while individuals took N$2.85 billion,” the analysts say.

They say individuals borrowed 1.3% more m/m and 4.2% y/y in March, with the monthly increase marking the highest monthly growth in credit extended to individuals since October 2019.

“The rise was driven by robust growth in mortgage lending and a rebound in overdraft facilities following a contraction in the previous month,” the analysts observed.

Mortgage loans grew by 1.9% y/y, representing the highest growth rate since February 2024 and points to increased appetite for property purchases.

IJG has observed that overdrafts rose by a modest 0.5% y/y after declining in February while growth in ‘other loans and advances’ eased to 5.9% y/y, extending a deceleration trend for the sixth consecutive month.

Meanwhile, the analysts say corporate entities borrowings dropped by 1.5% m/m, while annual growth slowed to 4.4% y/y from the previous month.

“This marks the weakest expansion in business credit since November 2024,” the analysts say, adding that the monthly decrease was due to a decline in both mortgage loans and overdrafts, which fell by 3.6% m/m and 4.6% m/m, respectively.

On an annual basis, mortgage loans softened by 0.3% y/y, while overdraft facilities contracted by 2.6% y/y, with the Bank of Namibia attributing this to net repayments on overdrafts.

Meanwhile, ‘other loans and advances’ remained flat on a monthly basis and increased by 3.3% y/y, although this represents a notable slowdown compared to previous months.

The analysts say the overall liquidity position of commercial banks rose to an average of N$7.76 billion in March, representing a 23.3% m/m increase from February’s average of N$6.30 billion.

According to the BoN, the higher liquidity levels were mainly driven by diamond sale proceeds and increased government spending associated with the fiscal year-end.

IJG says international reserves remained broadly stable at N$51.76 billion in March, edging up by 0.1% m/m from N$51.72 billion in February, with the central bank attributing the slight increase to rand inflows from commercial banks and customer foreign currencies placements.

“At this level, foreign reserves provide an estimated 3.2 months of import cover, rising to 3.6 months when excluding oil and gas exploration and appraisal-related imports,” the analysts say.
– email: matthew@namibian.com.na

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