Credit growth slows, but vehicle and equipment loans stay resilient
Namibia’s private sector credit growth slowed down slightly in April, according to the latest report by Simonis Storm Securities.
Additionally, economist Almandro Jansen is observing a broadbased reduction in lending to both households and businesses.
Private sector credit extension (PSCE) eased to 4.5% year on year (y/y) in April, down from 5% in March.
While the slowdown suggests a modest dip in overall credit momentum, pockets of resilience remain, particularly in instalment credit linked to vehicle and durable goods purchases.
“There’s still solid demand for asset-based lending, especially for cars and equipment, which continues to support overall credit expansion,” Jansen says.
On the corporate side, credit growth moderated to 7.1% y/y in April from 8.2% y/y the month before.
Businesses appeared more cautious, increasing their repayments and adopting a conservative stance on new borrowing.
Notably, growth in other loans and advances decelerated to 10.7%, and instalment and leasing credit slowed to 18.5%.
“Despite this moderation, the elevated levels in these categories suggest that corporates are still actively investing, particularly in sectors like transport, logistics, and capital equipment,” Jansen adds.
One area that bucked the broader slowing trend was overdraft credit, which climbed to 8.3% year on year.
This indicates that firms may be facing rising short-term liquidity pressures, possibly due to delayed payments or tighter cash flows in a challenging economic environment.
However, not all segments were upbeat.
Business mortgage credit fell deeper into negative territory, contracting by 3.1% y/y in April.
This decline highlighted a continued aversion to commercial property investment, largely attributed to elevated construction costs and ongoing macroeconomic uncertainty.
“Commercial property remains under pressure. Developers and investors are wary, especially given Namibia’s high building input costs and broader questions around future demand,” says Jansen.
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