Chamwe Kaira
Private Sector Credit Extension (PSCE) rose slightly to 5.8% year-on-year in August 2025, compared to 5.7% in July, showing a gradual recovery in credit demand driven mainly by corporate borrowing, according to FNB Namibia economist Helena Mboti.
Mboti said the modest increase reflects a cautiously improving credit environment supported by stronger business confidence and continued investment activity. Household credit expansion, however, remains limited due to weak income growth and affordability constraints.
Corporate credit led the growth, rising 10.3% year-on-year in August from 10.1% in July. Mboti said the increase was mainly supported by higher demand for other loans and advances, which rose to 11.8% and by instalment and leasing credit, which climbed to nearly 20% due to solid commercial vehicle sales in the mining and construction sectors.
“Increased borrowing by firms in the mining and construction sectors reflects operational expansion and investment in production capacity,” Mboti said. “These industries continue to anchor Namibia’s economic recovery.”
Household credit grew slightly to 2.8% year-on-year from 2.7% in July, while mortgage credit remained flat at 0.1%. High property prices and a limited housing supply continued to suppress mortgage demand.
Mboti said affordability remains a major hurdle, with more than half of employed Namibians earning below N$5,000 per month.
“The housing affordability gap remains a major structural challenge,” she said.
“Even as housing prices rise, most households lack the financial capacity to qualify for mortgage finance, keeping credit growth in this category subdued.”
Overdraft facilities fell by 13% due to ongoing net repayments by corporates and cautious liquidity management.
Namibia’s inflation slowed to 3.2% in August from 3.5% in July, driven by lower food, transport, and utility prices.
FNB expects inflation to edge up slightly to around 3.5% by year-end, supported by a stable exchange rate and weaker fuel prices.
Mboti said the Bank of Namibia’s decision to keep the repo rate unchanged in August provides a supportive monetary environment.
“Although borrowing costs remain relatively high, the pause in rate hikes offers some relief to both households and businesses,” she said.
FNB projects PSCE growth to average around 4.8% in 2025, with corporate borrowing remaining the key growth driver.
“Manufacturing, mining and construction sectors are set to sustain momentum in credit uptake, supported by ongoing project financing and operational expansions,” Mboti said.
