CHAMWE KAIRA
FNB Namibia’s corporate credit growth is expected to remain resilient but contained, averaging around 4.5% year-on-year in 2026.
FNB Namibia graduate analyst, Ndateelela Amukuhu said overall, corporate credit remains the primary driver of private sector credit growth, although the composition of borrowing points to a more cautious corporate environment.
With interest rates expected to remain elevated, corporates are likely to prioritise liquidity preservation and balance sheet management over expansion.
A breakdown by credit type shows a mixed performance across lending categories. Overdraft lending growth slowed sharply to 6% year-on-year in May from 11.4% year-on-year in April, mainly due to repayments by corporates, particularly in sectors such as mining, manufacturing and telecommunications.
Similarly, growth in other loans and advances declined to 0.5% year-on-year from 1.6% year-on-year, reflecting weaker demand from both households and businesses, as well as repayments by corporates in the retail sector.
In contrast, mortgage lending continued to improve gradually, with growth rising to 1.6% year-on-year in May from 1.2% year-on-year in April.
“This improvement was supported by stronger corporate mortgage borrowing, while household mortgage credit remained broadly stable,” said Amukuhu.
Meanwhile, installment sale and leasing credit remained the strongest-performing category, increasing to 22.2% year on year in May from 20.6% year-on-year a month earlier, driven mainly by sustained demand for vehicle financing, particularly from corporates.
Consistent with vehicle sales data, vehicle sales increased by 14.8% year on year in May, compared to 5.7% year on year in the previous month.
Amukuhu said overall, household credit conditions remained stable but cautious. Elevated interest rates, rising living costs and constrained purchasing power continues to weigh on affordability and borrowing appetite, she said.
“With the June 2026 rate hike still expected to filter through, household credit growth is likely to remain subdued, averaging around 4.0% in 2026,” she said.
She said corporate credit growth is expected to remain resilient but contained, averaging around 4.5% year on year in 2026.
Amukuhu said borrowing conditions are expected to remain tight until a more sustained moderation in inflationary pressures materialises. Inflation picked up to 4.1% year on year in May, rising by 1.1-percentage points (ppts) from April, mainly due to higher transport costs.
International reserves remained broadly adequate in May, although they declined to N$55.4 billion.
Amukuhu said the external position is expected to remain stable, supported by higher SACU receipts and easing external pressures.
