Private sector credit increases slightly in June
The Private Sector Credit extension remained subdued at the end of June, ticking up slightly to 2.5% from 1.8% in May as the total credit extended to the sector increased by N$408 million or 0.40% in June, bringing the cumulative credit outstanding to N$102.69 billion.
The latest numbers show corporates have been reducing their debt over the last 12 months and have seen N$1.60 billion in repayments as businesses de-risk and deliver their operations.
Rolling 12-month issuance has ticked up slightly to N$2.46 billion. However, cumulative 12-month private sector credit issuance is still down 63.1% from the N$6.65 billion figure as at June 2019.
IJG Research noted as most of the growth has been from mortgages to individuals where the 12-month cumulative issuance stands at N$2.93 billion, it may indicate some revival of activity in the Namibian property market. Corporates, however, have been reducing their debt over the last 12 months and have seen N$1.60 billion in repayments as businesses de-risk and deliver their operations.
“Despite Namibian interest rates now being at their lowest levels yet, and expectations are for possibly one more rate cut, this has not seemed to stimulated lending much. Economic activity remains muted and the outlook for the next two years remains extremely uncertain as the global effect of the pandemic and lockdowns still have to run their course. As a result, we do not expect to see a strong recovery in credit extension in the medium term,” IJG noted.