Namibia’s latest private sector credit numbers suggest something many businesses and banks have already fell on the ground: the pace of credit growth is easing, but the recovery itself has not gone anywhere. 

Data for December 2025 shows that private sector credit extension (PSCE) grew by 4.4% year on year, slightly down from 4.5% in November. 

An analysis by Simonis Storm said this continues a gentle slowdown that set in toward the end of the year. It is noticeable, but it is not a warning sign. 

Put into perspective, today’s credit environment looks far healthier than it did just a couple of years ago. After sluggish growth in 2023 and early 2024, lending activity has recovered meaningfully. For 2025 as a whole, PSCE growth averaged around 4.9%, nearly double the pace seen in 2024 and the strongest annual outcome since 2019. 

In other words, credit is still growing – just more carefully. 

Importantly, the recent softening does not reflect tighter monetary policy or stress in the banking system. Instead, it points to more cautious financial behaviour. Simonis Storm notes that corporate repayments, restrained household borrowing and lingering liquidity effects from Namibia’s Eurobond redemption all played a role. Borrowers appear to be tidying up their balance sheets after a rebuilding phase, rather than pulling back out of concern. By December, total private sector credit had climbed to N$123.9 billion. Households remained the biggest borrowers, accounting for just under 57% of the total, followed by corporates at about 42%. Exposure to non-residents stayed minimal. 

The continued expansion of the overall credit stock highlights the resilience of Namibia’s banking sector, even as economic pressures remain part of daily reality. 

Household debt continued to rise in nominal terms, reaching roughly N$83.3 billion in 2025, up from N$81.1 billion a year earlier. 

Corporate debt grew more modestly to N$45.9 billion, while credit to non-residents edged up slightly. These are not signs of aggressive borrowing. They rather reflect gradual, measured accumulation in a post-pandemic environment where discipline matters. On the corporate side, credit growth slowed to 6.8% year on year in December, down from 7.2% in November. This was largely driven by weaker demand and net repayments, especially in the financial, fishing and wholesale and retail trade sectors. 

Repayments were most visible in overdrafts and other loans, suggesting companies are focusing on liquidity management and balance-sheet optimisation as conditions normalise. Even so, business borrowing remains relatively firm. Companies are still investing, but selectively. Asset-backed financing continues to stand out, with instalment sale and leasing credit growing by a strong 18.5% year on year in December. 

Demand for vehicles, machinery and equipment, particularly in agriculture, mining, manufacturing, logistics and transport, remains solid, signalling confidence in medium-term operational needs. By contrast, growth in other loans and advances slowed to 6.6%, while overdraft credit eased further to 4.3%. This ongoing decline in short-term, revolving credit points to improved cash-flow positions and a deliberate move away from reliance on stopgap funding. Household credit tells a more mixed story. Growth ticked up slightly to 2.7% year on year in December, from 2.5% in November. While that is a mild improvement, the broader picture remains one of a slow and uneven recovery. Average household credit growth for 2025 was just 2.7%, only marginally better than the year before. Mortgage lending remains a weak spot. Total mortgage credit contracted by 0.1% (year-on-year) in December, marking a fourth consecutive month of decline, although the pace of contraction has eased. 

Business mortgage lending remained in negative territory, while household mortgages showed small monthly gains, possibly an early sign of stabilisation. Still, high construction costs, rising utility prices and a shortage of affordable housing continue to weigh heavily on the property market. The makeup of household credit reinforces this trend. 

Mortgage balances barely moved over the year, highlighting stagnation in housing finance. 

In contrast, instalment sale and leasing credit jumped sharply, driven by demand for vehicles and essential equipment. 

Other loans and advances also increased, reflecting selective use of unsecured credit for necessities, while overdraft exposure fell significantly. Instalment sales and leasing remain the strongest-performing household-linked category, growing by 15.5% year on year in December. Even here, much of the momentum is coming from corporate borrowers, underlining that businesses – not households – are still carrying most of the load. Overall, Namibia’s latest credit figures indicate an economy consolidating, not retreating. 

Credit growth is slowing, but it is doing so from a much stronger base. The cycle remains supportive of economic activity, even as households and firms borrow more cautiously, focus on assets and navigate ongoing cost pressures and structural challenges. -ebrandt@nepc.com.na