Private sector credit rises on higher corporate credit activity
Growth in total credit extended to businesses rose at the end of December 2017, pushing credit extended to the private sector to 5.1% from 4.7% at the end of November 2017.
The Bank of Namibia stated that the rise of credit extended to the business sector was specifically in the overdraft credit and other loans and advances categories which also rose at the end of December 2017.
According to the central bank, credit extended to businesses edged up to 2.7% during the period under review from a growth of 1.3% at the end of November 2017.
“The improved growth was mainly inline with businesses gearing up for the festive season in order to meet consumers demands during December 2017, thus increasing their demand for short-term borrowing, like overdraft credit, other loans and advances,” the bank stated in the Money and Banking Statistics report of December 2017.
The steady growth in overdraft credit mainly stemmed from the increased growth observed in overdraft credit extended to the corporate sector during the month under review.
Meanwhile, credit extended to individuals slowed to 6.7% from a growth of 7.1%. This sluggish growth is evident in most of the credit categories with the exception of other loans and advances, which rose at the end of December 2017, the central bank noted.
Furthermore, growth in credit extended to installment sales contracted further to 4.8% at the end of December 2017 from a contraction of 4.5% at the end of November 2017.
“The continued contractions in installment sales is a reflection of the general decline in the uptake of credit from both the household and corporate sectors at the end of the period under review,” the bank added.