… Namibians have whetted appetite for borrowing
WINDHOEK – Banks and car dealers have had a good run in recent months up to September this year thanks to Namibian households who have a penchant for borrowing money to buy cars and take out short-term consumption loans.
However, it has not been good going for estate agents because not many potential home seekers have been knocking on their doors, with figures showing a slow uptake in mortgage lending.
Government too is struggling to contain its debts but it has at least managed to stabilise its debt level and contain its short-term paper debts.
This is according to the Money and Banking Statistic analysis of the debt level between September 2012 and September 2013 by the local stock broking and research firm Simonis Storm Securities. The analysis shows that household debts have jumped 14.47 percent and now stand at N$34.86 billion as of September 2013, from N$30.46 billion in September 2012.
“This represents the highest yearly growth since September 2012. Instalment credit grew by 12.81 percent, the highest yearly growth since January. This is mainly on the back of the robust growth in vehicle purchases during that period. Stable interest rates from banks and consumer sentiment amongst middle to upper income groups continues to spur the growth in this sector. As the final quarter of the year approaches, we expect continued growth specifically in the other loans category. Instalment credit is expected to moderate based on seasonal adjustments,” said the analysis document from Simonis Storm Securities.
Total Namibian debt including domestic and foreign government, corporate and household debt, as at the end of September stood at N$83.39 billion up from N$75.48 billion a year ago. This translates to a 10.41 percent increase over the 12-month period.
Government though has done okay, reining in its total debt at between N$24 billion and N$28 billion. Over the 12 months to September 2013, total government debt grew by 5.13 percentsto N$27.26 billion. The government continues to reduce the proportion of its domestic treasure bills, but bond issuance is up from 21.57 percent in July, to 22.95 percent in September year-on-year, says the analysis document.
The credit extension growth rate to the corporate sector continues to decline on a yearly basis as it stands at 16.05 percent. Government debt grew by 5.13 percent, much lower than the private sector credit extension numbers.
Credit extended to the private sector (corporate and households) grew to N$56.14bn in September. The annual growth in credit extension remains moderate with growth attributed mainly to mortgages and installment credit. The highest y-o-y growth figures came from the Other Loans category which registered 23.98 percent. The 12-month growth in September eased slightly to 13.29 percent from 13.93 percent in August.
“We would like to highlight that growth in private sector credit extension has been declining year on year since June from 15.47 percent to 13.29 percent in September. The main reason seems to be a general slowdown in [yearly] growth of mortgage uptakes. We expect the numbers to be different in the future based on the various stimulus projects within the real estate market. What indicates that sentiment is still strong (for credit uptake) is that instalment credit has been growing from 10.67 percent in May to 12.01 percent in September,” says the analysis.
By Desie Heita