CHAMWE KAIRA
Growth in credit extended to households remained constant in September. The annual growth in credit extended to households stood at 4.9% at the end of September, the same rate as recorded in August.
Slight improvements in categories such as mortgages, instalment sale and leasing, and overdrafts were offset by a decrease in other loans and advances.
Meanwhile, credit extended to businesses strengthened, pushing annual growth in private sector credit extension (PSCE) to 5.6% from 5.4% in August.
The total loan book to the domestic private sector stood at N$128.2 billion, with the September growth rate representing the highest PSCE expansion since September 2025.
The Bank of Namibia attributed the increase mainly to higher business borrowing through other loans and advances and mortgage credit, particularly from companies operating in the real estate, wholesale and retail, and health sectors.
Annual growth in business credit rose to 6.7% in September from 5.9% in August, reflecting stronger demand for financing during the month.
Other loans and advances recorded annual growth of 5.9%, up from 4.7% in August, largely driven by increased borrowing from businesses in the real estate, wholesale and retail, and health sectors.
Mortgage credit extended to the private sector also improved, with annual growth increasing to 2.9% from 1.9% in August.
The improvement was supported by sustained household demand and a return to positive growth in corporate mortgage lending.
Corporate mortgage credit growth reached 0.8%, following a prolonged period of contraction.
Instalment sale and leasing credit remained the fastest-growing lending category, although annual growth moderated to 16.6% in September from 18.7% in August.
The slowdown was attributed to weaker demand and net repayments during the month.
Household overdraft credit growth increased slightly to 6.6% from 6% in August, reflecting higher demand.
However, overall overdraft credit growth declined sharply to 3.4% from 6.9% as businesses continued to settle their overdraft balances.
The banking industry’s average cash position also weakened during September, declining by 31% to N$4.5 billion from August.
The central bank said the cash position remained adequate for the smooth functioning of the money market, despite the decline, which was mainly attributable to increased government borrowing through the issuance of government securities.
Meanwhile, Namibia’s stock of foreign reserves increased by 1.4% month-on-month to N$59.3 billion at the end of September.
The increase was primarily driven by net rand inflows from commercial banks and favourable price revaluations, supported by customer foreign currency inflows and continued gold monetisation.
The reserve position translated into an estimated import cover of 3.6 months, rising to four months when oil and gas exploration and appraisal-related imports were excluded.
The Bank of Namibia said reserves were equivalent to 10.1 times the currency in circulation, a level considered adequate to sustain the Namibia dollar’s peg to the South African rand and meet the country’s short-term international obligations.
Growth in broad money supply, however, slowed during the month. Broad money supply (M2) expanded by 8% annually in September, compared with 10.2% in August.
