Businesses boost credit uptake in April 2022
Households ‘reluctant’
On 13 April 2022, the central bank increased the repo rate by 25 basis points to 4.25%, bringing the prime lending rate at 8.0%.
Businesses in the agricultural and health services sectors as well as the commercial rental property space boosted credit uptake during April 2022. Loans advanced to businesses rose to 5.9% at the end of April 2022, relative to a growth of 1.9% a month ago, according to the Bank of Namibia (BoN).
Overall, growth in private sector credit extension (PSCE) increased to 3.8% at the end of April 2022 compared to 2.1% at the end of March 2022, the highest recorded since July 2021 when a growth of 3.0% was observed.
Growth in credit extended to households moderated to 2.2% at the end of April 2022, compared to a growth of 2.3% reported at the end of the preceding month, BoN said.
According to Simonis Storm, year to date, net growth in household debt has been on a declining trend, with monthly annual growth rates averaging 2.7% for mortgages, 0.3% for overdrafts and 1.2% for instalment credit.
As for comporates, credit uptake has been trending upwards year to date, with monthly annual growth rates averaging 5.1% for mortgages, -3.7% for overdrafts and 9.2% for instalment credit, Simonis pointed out.
On 13 April 2022, the central bank increased the cost of borrowing. The repo rate increased by 25 basis points to 4.25%, bringing the prime lending rate at 8.0%. The next monetary policy announcement is set to take place on 15 June 2022. Local analysts expect a repo rate hike following the South African Reserve Bank (SARB) decision to increase the repo rate by 50 basis points to 4.75% at its May 2022 meeting.
PRICE MONSTER
“Historically, growth in private sector credit extension still remains subdued as low borrower’s appetite persists for credit amid a rise in inflation,” BoN pointed out.
During April 2022, inflation which was main driven by transport and food and non-alcoholic beverages which stood at 5.6%, compared to 3.9% recorded in April 2021.
Transport inflation stood at 18.9%, up from 13.8% recorded in March 2022, while food and non-alcoholic beverages inflation stood at 5.7%, compared to 4.6% in the preceding month, according to the Namibia Statistics Agency (NSA).
Prices in the transport category were mainly driven by fuel, while inflation in the food and non-alcoholic beverages category was driven by oil and fats.
On Monday the Ministry of Mines and Energy announced an increase in fuel prices, bringing it to a new all-time high.
Since yesterday, motorists started paying N$2.50 per litre more for petrol and N$1.50 per litre extra for diesel. The increase could have been worse, thanks to a temporary three-month reduction in fuel levies.
There is no doubt that every average Namibian consumer will be affected by the increase as fuel is a key input in various industries of the economy. Therefore, consumers can expect an increase in the prices of other goods and [email protected]
Overall, growth in private sector credit extension (PSCE) increased to 3.8% at the end of April 2022 compared to 2.1% at the end of March 2022, the highest recorded since July 2021 when a growth of 3.0% was observed.
Growth in credit extended to households moderated to 2.2% at the end of April 2022, compared to a growth of 2.3% reported at the end of the preceding month, BoN said.
According to Simonis Storm, year to date, net growth in household debt has been on a declining trend, with monthly annual growth rates averaging 2.7% for mortgages, 0.3% for overdrafts and 1.2% for instalment credit.
As for comporates, credit uptake has been trending upwards year to date, with monthly annual growth rates averaging 5.1% for mortgages, -3.7% for overdrafts and 9.2% for instalment credit, Simonis pointed out.
On 13 April 2022, the central bank increased the cost of borrowing. The repo rate increased by 25 basis points to 4.25%, bringing the prime lending rate at 8.0%. The next monetary policy announcement is set to take place on 15 June 2022. Local analysts expect a repo rate hike following the South African Reserve Bank (SARB) decision to increase the repo rate by 50 basis points to 4.75% at its May 2022 meeting.
PRICE MONSTER
“Historically, growth in private sector credit extension still remains subdued as low borrower’s appetite persists for credit amid a rise in inflation,” BoN pointed out.
During April 2022, inflation which was main driven by transport and food and non-alcoholic beverages which stood at 5.6%, compared to 3.9% recorded in April 2021.
Transport inflation stood at 18.9%, up from 13.8% recorded in March 2022, while food and non-alcoholic beverages inflation stood at 5.7%, compared to 4.6% in the preceding month, according to the Namibia Statistics Agency (NSA).
Prices in the transport category were mainly driven by fuel, while inflation in the food and non-alcoholic beverages category was driven by oil and fats.
On Monday the Ministry of Mines and Energy announced an increase in fuel prices, bringing it to a new all-time high.
Since yesterday, motorists started paying N$2.50 per litre more for petrol and N$1.50 per litre extra for diesel. The increase could have been worse, thanks to a temporary three-month reduction in fuel levies.
There is no doubt that every average Namibian consumer will be affected by the increase as fuel is a key input in various industries of the economy. Therefore, consumers can expect an increase in the prices of other goods and [email protected]
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