Namibians unable to honour monthly bills

Martin Endjala

About 45 percent of Namibians are struggling or unable to pay their monthly bills and loans in full as they continue to experience financial challenges due to rising inflation rates and job losses.

This is according to the latest TransUnion Consumer Pulse Study for the third quarter (Q3) released this week. This shows that 20 percent of consumers had their income increased in the last three months and close to 36 percent reported a salary decrease.

As a result, 56 percent of consumers have cut back on their discretionary spendings such as dining out, travel and entertainment over the past three months, and despite encouraging economic signs, Namibian consumers remain under financial pressure.

Nearly 98 percent of consumers believed access to credit and lending products is important to achieve their financial goals, however, just over a third of the people felt they had sufficient access to credit, and 35 percent intended to apply for new credit or refinance within the next year.

Lara Burger, the Country Manager at TransUnion Namibia, yesterday said many consumers have been forced to adjust their household budgets in response to these challenges, with 56 percent cutting back on discretionary spending.

She said consumers are bracing for further financial strain, emphasising that 38 percent of consumers in TransUnion’s survey are expected to increase spending on bills and loans over the next three months, while 33 percent are expected to decrease their spending.

In addition, 48 percent planned to make cuts to their discretionary spending in the next three months, and 28 percent expected a decrease in large purchases.

According to Namibia’s Central Bureau of Statistics, the country’s inflation rate rose to 4.7 percent in August, going up from a near one-and-a-half-year low of 4.5 percent in July 2023.

Burger stated that this is expected to increase some consumer costs, particularly around food prices.

“Gross Domestic Product grew by 5.8 percent in the first quarter of 2023 over the previous quarter, recovering sharply from a 1.8 percent fall in the previous period, pointing to its strongest growth since the first quarter of 2013,” she noted.

Meanwhile, in terms of identity risks and usage, Burger raised concerns about fraud which is reported to be on the rise.

She said this indicates a significant need for stronger security measures and robust fraud prevention strategies.

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