Justicia Shipena
Businesses in Namibia are showing more caution in their borrowing activity, with corporate credit growth continuing to slow in May 2025.
According to Simonis Storm’s latest Private Sector Credit Extension report, companies are becoming more deliberate in their financing decisions amid a complex economic environment.
The total corporate debt stock rose slightly to N$50 billion in May, up from N$49.5 billion in April.
However, the annual growth rate declined to 6.5%, compared to 7.1% in the previous month.
Simonis Storm noted that this moderation was driven by net repayments and lower uptake across key lending categories.
“Companies are not pulling out of credit markets. They are just being more selective and strategic about how and when they borrow,” the report stated.
Meanwhile, growth in instalment and leasing credit dropped to 13.1% year-on-year from 18.5% in April.
Despite this, Simonis Storm said investment in capital goods such as vehicles, machinery, and equipment remains stable in sectors like transport, logistics, and energy.
The data shows that firms are still investing but with a more long-term and calculated approach.
Other loans and advances also recorded slower growth, easing to 8.7% year-on-year.
This was mostly seen in the services and construction sectors, where project rollouts are becoming more staggered.
The report noted that many businesses are focusing on preserving liquidity in response to rising input costs, weaker demand, and ongoing global uncertainties.
Overdraft facilities, on the other hand, grew sharply. The outstanding balance reached N$9.7 billion in May, up from N$8.3 billion in April, marking a 12.1% annual increase.
This is the third month of consecutive growth in overdraft credit, indicating that companies are still depending on short-term financing to manage cash flow swings.
Mortgage lending continued to decline. Commercial mortgage balances dropped to N$13.1 billion, with annual growth falling further into negative territory at –3.0%.
According to the report, businesses remain hesitant about investing in property, with many reassessing space needs in light of changes in the office and retail sectors.
High construction costs and longer return periods are also contributing to the slowdown.
With the repo rate steady at 6.75%, borrowing costs have stabilised, stated Simonis Storm.
However, Simonis Storm expects that demand for credit will continue, but at a slower, more measured pace.
It said companies are aligning their borrowing with productivity needs and financial discipline, rather than aggressive expansion.
“Firms are borrowing with purpose, focusing on operational efficiency, resilience, and liquidity management,” the report stated.
