With a resurgence largely driven by a surge in overdraft lending across both households and corporates, Namibia’s Private Sector Credit Extension (PSCE) has shown its strongest expansion since the start of the year and the highest level seen since September last year.
This is as PSCE increased to 4.8% year-on-year (y/y) in April 2026, from 4.3% y/y in March 2026.
In an analysis of the latest figures, FNB Namibia Graduate Analyst Ndateelela Amukuhu pointed out that while aggregate credit growth has strengthened, its composition continues to reflect a cautious environment, with borrowing increasingly concentrated in shorter-term instruments rather than longer-term credit extension.
Meanwhile, corporate credit growth remained the primary driver of overall credit extension, accelerating to 5.5% y/y in April from 4.4% y/y in March. The FNB report noted that household credit growth edged slightly higher to 4.2% y/y in April, up from 4.1% y/y a month ago, marking its strongest level since December 2023.
Amukuhu further noted that this still indicates relatively constrained demand in the household segment.
“From a credit category perspective, the key driver of the monthly improvement was a sharp rebound in overdraft lending, from -2.0% y/y in March to a growth of 11.4% y/y in April. Increased demand in this segment was supported by both households and corporates, with the latter, particularly the mining sector, contributing more strongly to the uptick,” the FNB report states.
Elsewhere, credit growth remained more subdued. Instalment sale and leasing credit continued to expand, albeit at a slower pace of 20.6% y/y in April, down from 21.2% y/y in March, reflecting a modest easing in demand from both households and corporates. Similarly, other loans and advances slowed significantly to 1.6% y/y in April, from 4.3% y/y in March, largely due to ongoing repayments by corporates in the commercial and services sectors, alongside softer uptake from households.
At household level, credit growth showed a modest pickup to 4.2% y/y in April, from 4.1% y/y in the previous month, with the increase largely driven by overdraft lending. Overdraft growth accelerated sharply to 5.4% y/y in April, up from just 0.5% y/y in March. This shift suggests increasing reliance on short-term credit, likely reflecting mounting financial pressure on households to manage day-to-day expenses rather than finance longer-term consumption.
On the corporate front, credit remains the primary driver of overall credit growth, accelerating to 5.5% y/y in April from 4.4% y/y in the previous month. A notable development over the period was the strong rebound in overdraft lending, which surged to 12.9% y/y in April after contracting by 2.6% y/y previously.
This was largely driven by increased demand from the mining sector. The shift suggests growing reliance on short-term funding, potentially pointing to mounting cash flow pressures and the need to support operational liquidity amid an uncertain economic environment.
The FNB report on PSCE further noted that instalment and leasing credit remained relatively firm, although growth eased marginally to 27.7% y/y in April from 28.5% y/y in March.
This moderation aligns with a 16.7% month-on-month (m/m) decline in commercial vehicle sales, despite strong annual growth of 33.0% y/y, which continues to suggest resilient underlying demand. In contrast, other credit categories weakened, with other loans and advances contracting by 1.0% y/y in April, down from 3.3% y/y in March, as corporates in the commercial and services sectors continued to deleverage and settle outstanding debt.
Meanwhile, mortgage credit deepened its contraction to 1.0% y/y in April from -0.4% in March, further highlighting persistent supply challenges in the property market.
Overall, while corporate credit is expected to remain the main driver of credit growth, averaging around 4.0%, the composition suggests a cautious stance. The combination of rising short-term borrowing and weakening longer-term lending indicates that firms are prioritising liquidity and balance sheet consolidation over expansion, which is likely to keep overall credit growth contained in the near term.
–ebrandt@nepc.com.na