Credit growth loses momentum in December

Private sector credit growth in Namibia eased slightly to 4.4% year-on-year (y/y) in December 2025, down from 4.5% in November, signalling a continued loss of momentum as the year drew to a close, according to Simonis Storm’s December private sector credit extension (PSCE) report.

While the latest reading confirms the gradual slowdown observed in recent months, Simonis Storm noted that overall credit growth remains meaningfully stronger than the subdued levels recorded during 2023 and early 2024.

“This suggests that, despite some moderation, the underlying credit cycle remains broadly supportive of economic activity. For 2025 as a whole, PSCE growth averaged around 4.9% — a clear improvement from 2.5% in 2024 and 2.4% in 2023. The 2025 outcome is the strongest since 2019,” Simonis Storm said.

“The late-year softening appears to reflect a combination of corporate repayments, cautious household borrowing, and residual liquidity effects following the Eurobond redemption, rather than any tightening in financial conditions,” it added.

Total credit extended

By December 2025, the total stock of private sector credit had risen to N$123.9 billion. Households accounted for the largest share at 56.9%, followed by corporates at 41.7%, with non-residents comprising 1.3%.

“The steady expansion in outstanding credit continues to point to a resilient and well-capitalised banking system, even as households contend with rising living costs, moderate income growth, and ongoing softness in the property market,” Simonis Storm said.

On a year-on-year basis, household debt increased by N$72.2 billion.

“These differing borrowing dynamics lifted the overall stock of private sector debt in 2025. Household debt rose to N$88.3 billion from N$81.1 billion a year earlier, while corporate debt edged up to N$45.9 billion,” the firm said.

Non-resident and corporate credit

Credit extended to non-residents also increased modestly to N$7.9 billion over the same period.

On the corporate side, credit growth slowed to 6.8% y/y in December, from 7.2% in November.

“The moderation was driven primarily by softer demand and net repayments, particularly in the financial, fishing, and wholesale and retail trade sectors. Repayments were most evident in overdraft facilities and other loans and advances, suggesting that many firms are prioritising liquidity management and balance-sheet consolidation as conditions normalise,” Simonis Storm said.

“Even so, corporate credit growth remains relatively firm, pointing to a cautious but still expansionary stance among productive sectors. Instalment sale and leasing credit continued to outperform other credit categories, although growth moderated slightly to 18.5% y/y in December, from 18.9% previously,” it added.

Asset-backed lending drives growth

Simonis Storm noted that strong demand for vehicles, machinery, and equipment from both households and businesses continues to underpin instalment sale and leasing credit, particularly in agriculture, mining, manufacturing, logistics, and transport.

“The persistence of asset-backed borrowing suggests that confidence in medium-term operational demand remains intact, even as overall credit growth slows,” the firm said.

By contrast, growth in other loans and advances eased further to 6.6% y/y, from 7% in November, indicating weaker appetite for project-based and unsecured borrowing. Overdraft credit growth also slowed to 4.3%, extending its downward trend as businesses reduced reliance on short-term liquidity facilities.

This pattern is consistent with improving cash-flow positions and more disciplined balance-sheet management.

Household credit and mortgages

“Household credit showed a modest improvement, with growth edging up to 2.7% y/y in December, from 2.5% in November,” Simonis Storm said.

The improvement was supported by a slight uptick in mortgage demand, aided by a lower interest rate environment. However, household borrowing remains constrained by affordability pressures, modest wage growth, and elevated living costs, with demand still concentrated in asset-backed lending rather than unsecured credit.

Mortgage lending remained subdued overall, with mortgage credit contracting by 0.1% y/y in December — a fourth consecutive month of decline — although the pace of contraction improved from –0.5% in November. Business mortgage lending remained in negative territory, while household mortgage credit rose marginally on a month-on-month basis, offering early signs of stabilisation.

“Nevertheless, the continued weakness in mortgage lending reflects structural challenges in the property market, including high construction costs, rising utility charges, and limited availability of affordable housing,” Simonis Storm said.