Credit relief extended to bank clients amounted to 8.9% of total industry loans and advances. This is according to chief executive officer (CEO) of Standard Bank Namibia, Vetumbuavi Mungunda, who on Friday said the total value of credit relief provided by banks stood at N$9.2 billion by the end of September.
Mungunda made these sentiments at a one-day seminar on the impact of Covid-19, which was aimed at mapping the way forward for economic recovery. Breaking down the credit relief figures, Mungunda said the individual category was provided with N$3.9 billion, the tourism sector with N$2.2 billion, the real estate sector with N$1.6 billion, the transport and construction sectors with N$554 million while agriculture, finance and insurance and other sectors received N$946 million.
At the same event, Bank of Namibia governor, Johannes !Gawaxab, stated that the banking industry has collectively approved most of its clients’ requests for repayment holidays, especially for individuals and sectors hit hardest by Covid-19.
“Since, the effective implementation of the debt relief measure on 1 April 2020, the banking industry received a total of 22 506 applications for repayment holidays for the period up to July 2020 which declined to 19 308 as at 30 September 2020,” !Gawaxab noted. However, the total loans approved in volumes increased from 10 071 in July to 12 170 at the end of September 2020.
In addition to cutting the repo rate, the Bank of Namibia implemented a set of macro-prudential and liquidity policy measures to soften the blow of the potential impact of the pandemic outbreak on individuals, small and medium enterprises (SMEs) and corporations and on the banking system in general.
He said these policy measures entailed loan repayment moratorium, liquidity relief measures, and relaxation of the capital conservation buffer and concentration risk or single borrower limit, which were captured in the determination on policy changes in response to economic and financial stability challenges.
Applications approved originated from various sectors of the economy impacted by the Covid-19 pandemic.
“The number of loan approvals per the top five sectors indicated that individuals dominated the approvals with 8 101 up to September 2020 from 6 563 recorded on 15 July 2020, followed by real estate and business services sector with 1 258 for September, a decrease from 1 263 from July,” said the central bank governor.
Also, the trade, tourism, and hospitality sector stood at 1 028 during September, up from 896 recorded in July, while the transport sector stood at 428 loan approvals during September, which is higher than the 392 recorded in July. Construction stood at 385 loan approvals for September up from 324 recorded in July 2020.
!Gawaxab indicated that banks also received 34 new applications from mining companies amounting to N$391.6 million during the period to September 2020. Other sectors that were granted loans as at 31 September 2020 were the agriculture sector with 194 approvals, electricity, gas and water sector which stood at 98 approvals, finance and insurance at 157 approvals, government services at 31 approvals, manufacturing at 114 approvals, wholesale and retail sector at 17 approvals, the fishing sector received nine approvals while the other sectors were allocated 316 approvals.