Staff Reporter
PRIVATE sector credit growth in Namibia edged up to 4.7% year-on-year in February 2026, driven mainly by stronger corporate borrowing, while household credit remained subdued amid ongoing economic pressures.
According to the latest FNB Namibia Private Sector Credit Extension (PSCE) report compiled by economist Cheryl Emvula and graduate analyst Ndateelela Amukuhu, credit growth improved from 4.2% in January, marking a modest recovery after several months of slower momentum.
The rebound was largely supported by the corporate sector, where credit growth accelerated to 7.3% year-on-year, up from 5.8% the previous month. In contrast, household credit growth eased slightly to 2.9% from 3.0%, reflecting continued financial strain on consumers.
Overall credit expansion was driven by strong growth in instalment sales and leasing, which rose by 20.0% year-on-year, alongside increases in other loans and advances and a gradual recovery in mortgage lending. However, overdraft credit growth slowed significantly to 4.0%, limiting the pace of overall expansion.
On the household side, demand for credit remained constrained, with declines in overdrafts and slower uptake of other loans pointing to cautious borrowing behaviour. Despite this, vehicle financing remained a bright spot, supported by increased demand for passenger vehicles.
Corporate borrowing, meanwhile, benefited from increased demand for short-term financing and asset-based credit, although subdued conditions persisted in mortgage lending and overdrafts as businesses remained cautious amid economic uncertainty.
Looking ahead, PSCE growth is expected to average around 3.0% in 2026, with corporate credit continuing to drive expansion, while household credit is likely to remain under pressure due to structural challenges and rising living costs.
Meanwhile, inflation slowed to 2.4% in February, although risks remain tilted to the upside following recent fuel price increases. The Bank of Namibia is expected to maintain the repo rate at 6.50% in the near term to support currency stability and manage inflation risks.
Despite a slight decline in international reserves to N$51.7 billion, reserve levels remain adequate, while growth in broad money supply strengthened, reflecting improved liquidity conditions in the economy.
Photo: FNB Namibia
