The private sector credit extension (PSCE) increased slightly to 4.5% in June from 4.3% in May, with total claims on the private sector reaching N$125.49 billion, according to IJG Securities.
The Bank of Namibia, in its June money and banking statistics, attributed the marginal growth to a higher uptake by both households and businesses during the reporting month.
IJG revealed that total credit extended to businesses increased by N$903.4 million, lifting the outstanding credit balance to N$53.19 billion and increasing the annual growth to 4.5% year-on-year from 4.4% year-on-year.
According to the Bank, the improvement was primarily driven by a rebound in other loans and advances, which increased to 2.5% year-on-year from -2.4% year-on-year in May, following two consecutive months of annual contraction. Businesses in the mining, wholesale and retail, financial services and the energy, oil and petroleum sectors also contributed to this growth.
As a result, the IJG noted that the outstanding balance of other loans and advances rose by N$798.4 million to N$21.04 billion.
Business overdraft balances also increased during the month, rising by N$234.4 million, despite annual growth easing to 2.2% year-on-year from 6.1% year-on-year in May.
In contrast, the recovery in corporate mortgage lending declined, with the outstanding balance declining by N$196.8 million month-on-month to N$13.03 billion in June. Consequently, annual corporate mortgage lending declined by 1.1% year-on-year after recording growth of 0.3% year-on-year in May.
Meanwhile, credit extended to individuals increased by N$408.8 million, bringing the total stock of household credit to N$72.30 billion, also increasing to 4.5% year-on-year, the strongest expansion since August 2023.
The bank noted that the improvement was underpinned by broad-based growth across most lending categories, with mortgage lending and instalment and leasing credit remaining the primary contributors.
Household mortgage lending gained momentum, with the outstanding balance increasing by N$217.7 million to N$46.88 billion. Instalment sale and leasing credit also increased, with annual growth edging up to 14.8% year-on-year from 14.6% year-on-year in May, indicating continued demand for vehicle and asset finance.
Other loans and advances recorded modest monthly growth of 0.5% month-on-month, although annual growth continued to moderate, easing to 4.9% year-on-year from 5.3% year-on-year in May. Annual household credit growth was offset by overdraft balances, which declined by N$45.7 million during the month.
However, annual overdraft growth accelerated sharply to 12.5% year-on-year from 5.8% year-on-year, with the outstanding balance increasing by N$48.6 million over the past year to N$2.59 billion.
