First National Bank Namibia (FNB) has reported that Private Sector Credit Extension (PSCE) held steady in July 2025, with business credit continuing to be the primary contributor to PSCE growth, although it decelerated slightly to 10.1% year-on-year (y/y) in July from 10.6% y/y recorded in the previous month.
Meanwhile, household credit showed a marginal improvement, rising to 2.7% y/y in July 2025 from 2.4% y/y the previous month. However, this increase was not sufficient to offset the slowdown in corporate credit, resulting in an overall muted PSCE performance, though business credit continues to play a leading role in supporting growth.
According to the latest data issued by economist Cheryl Emvula, corporate credit growth eased slightly to 10.1% y/y in July, down from 10.6% y/y in June. Despite this marginal slowdown, the rate remains significantly higher than the 0.8% y/y recorded during the same period last year.
Private Sector Credit Extension (PSCE) remained unchanged at 5.7% y/y in July 2025, consistent with the growth recorded in June 2025.
PSCE refers to the total amount of credit extended by banks and financial institutions to businesses and households.
When credit growth holds steady, it signals consistent lending activity, which is often interpreted as a positive indicator of economic stability and confidence.
“Among the major credit categories, instalment and leasing credit recorded the highest annual growth, though it eased slightly to 17.0% y/y in July from 17.4% a month ago. This moderation aligns with vehicle sales report, which showed a slight monthly decline of 0.3%, with total units sold at 1 309 in July 2025,” he said.
He added that overdraft lending growth remained strong but also slowed to 14.9% y/y from 17.4% y/y in June, mainly due to repayments from businesses in the manufacturing and wholesale, and retail sectors. In contrast, other loans and advances grew moderately by 8.6% y/y in July from 8.3% y/y in June, supported mainly by corporate borrowing and stood out as the only category to see improvement over the month.
“Conversely, mortgage credit growth stood at 0.0% y/y in July, although this was an improvement from the 0.3% y/y contraction recorded in June. While household mortgage credit saw slight gains, it was offset by declining corporate demand for mortgage credit, result ing in muted growth,” he said.
-pmukokobi@ nepc.com.na