Private sector credit increases by N$4.22 billion in January
Private sector credit increased by N$4.22 billion or 4% in January, the largest month-on-month percentage increased since 2003, bringing the cumulative credit outstanding to N$110.6 billion, according to the Bank of Namibia.
On a year-on-year basis, private sector credit grew by 4.8% in January, substantially quicker than the 1% growth recorded in December.
Cumulative credit extended to the private sector over the last 12 months amounted to N$5.04 billion. N$1.9 billion worth of credit has been extended to individuals on a 12-month cumulative basis, while N$917.9 million was extended to corporates. Claims on non-resident private sectors increased by an immense N$2.4 billion during the month, which drove most of the increase in the overall private sector credit figure.
IJG economists said while the private sector started off the year with a strong 4%, it should be noted that a significant portion of the increase has been driven by an increased uptake of overdraft facilities, particularly by corporates.
“Overdraft facilities are typically used to address short-term funding requirements, and not to fund long-term capital investment projects. The N$2.4 billion increase in claims on non-resident private sectors is however encouraging,” IJG noted.