1 in 11 Namibians borrows from microlenders

Nearly one in every 11 Namibians was a microlending borrower in 2025, compared with approximately one in every 13 in 2024, as the number of borrowers increased by 16.3% from 240 475 to 279 594, according to figures from the Namibia Financial Institutions Supervisory Authority (NAMFISA).The increase means that 39 119 more Namibians were borrowing from microlenders at the end of 2025 than a year earlier, raising concerns about the financial pressures facing households and their growing reliance on short-term credit.The population comparison is based on Namibia's 2023 Population and Housing Census, which recorded 3 022 401 people. Using that figure, microlending borrowers represented approximately 8% of the population in 2024, increasing to 9.3% in 2025.NAMFISA's figures also show that Namibians took out N$5.3 billion in microlending loans during 2025, although the total outstanding amount owed to microlenders declined by 6.4% to N$7.6 billion.The contrasting trends suggest that borrowing is spreading across a larger number of people, even as the industry's outstanding loan book becomes smaller.Business analyst Almandro Jansen, an economist at Simonis Storm, said the figures could point to growing pressure on household cash flow, with some consumers potentially using credit to bridge the gap between income and monthly expenses.“My reading is that the data points to strained liquidity in a growing share of households, more than outright insolvency. People are borrowing to manage the gap between income and expenses, not to expand their wealth,” Jansen said.He said the rising cost of food, transport, rent, utilities and school expenses, combined with wages that have not kept pace, could be leaving households financially stretched before the end of each month.“A household can be no worse off this month than last and still be structurally short at month-end,” he said.Jansen cautioned that the decline in outstanding debt should not necessarily be interpreted as evidence that household finances are improving, particularly when the number of people relying on microlenders continues to increase.While the total outstanding loan book declined, the increase in borrowers suggests that the average outstanding balance per borrower may have fallen. Jansen said this could reflect smaller loans, shorter repayment periods, tighter lending assessments or debt written off by lenders, rather than improved financial security.“Smaller loans spread across many more people can just as easily describe wider financial stress,” he said.Limited access to traditional bank loans could also be pushing lower- and middle-income earners towards microlenders, particularly those offering payroll-linked loans to formally employed workers.Borrowing to surviveOld Mutual financial adviser Zono Kambepira warned that microlending becomes particularly concerning when people repeatedly borrow to cover basic living expenses instead of using credit for once-off emergencies.Medical bills, funerals and unexpected vehicle repairs are among the situations that could push people towards short-term loans when they have insufficient savings. However, regularly borrowing to pay for groceries, rent or transport could indicate that household income is no longer enough to cover monthly needs.Repeated borrowing can also create a cycle in which an increasing share of a person's salary goes towards repayments, leaving less money for food, housing and other essentials.“Using new loans to repay existing debt is often a sign of financial strain and can lead to long-term affordability issues,” Kambepira said.The financial adviser said borrowers should consider the full repayment amount, including interest and fees, rather than focusing only on how much money they receive.Repayments should remain affordable after essential expenses such as housing, food, transport and utilities have been covered.Kambepira said young adults, working parents and pensioners could face different pressures that influence their borrowing decisions.Young workers may have limited savings and struggle to qualify for bank finance, while parents face the combined costs of food, school expenses, housing and supporting dependants.Pensioners, meanwhile, may be particularly vulnerable because their incomes are fixed while living costs continue to rise.More information neededKambepira called for more detailed information on borrowers' ages, loan purposes, repayment difficulties and the number of loans held by each person to establish which households are under the greatest financial pressure.The adviser also wants better information on whether loans are being used for emergencies, small businesses or recurring household expenses.Such information would help establish whether the growing number of borrowers reflects increased access to credit or a deeper problem of households struggling to meet their monthly expenses.Kambepira said budgeting, emergency savings and responsible borrowing remained important safeguards against unsustainable debt.Although microlending can provide much-needed short-term financial assistance, the increase from approximately one in every 13 Namibians in 2024 to one in every 11 in 2025 raises questions about how many households can meet their basic needs without relying on borrowed money.-desmarius@nma.com.na

1 in 11 Namibians borrows from microlenders

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Namibian Sun 2026-10-15

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1 in 11 Namibians borrows from microlenders

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Namibian Sun 2026-10-15

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