Bank lending rates go up

The country’s private banking institutions have officially followed suit after the central bank’s recent decision to raise the price of lending. After the Bank of Namibia’s (BoN) announcement last week of a 0.25% rise in its prime lending rate, the country’s four major lenders this week confirmed similar hikes in their individual prime lending and home loan base rates. In the case of FNB Namibia, Bank Windhoek and Nedbank Namibia, all three institutions announced a 0.25% increase in their prime and home loan rates, to take effect on July 1 (Tuesday). A similar hike by Standard Bank Namibia already took effect last week, on June 20, bank spokesperson Surihe Gaomas-Guchu said yesterday. The rate increases effectively raise the new prime lending rate across the board to 9.50%, from the previous 9.25%. The new home loan base rate at all four lenders has effectively increased to 10.50%, from the prior 10.25%. “While this might be bad news for people with a lot of debt, it is good news for people with savings as the interest rate on these will also go up,” FNB Namibia’s Treasurer Michelle van Wyk said of the new developments. “Warning signs have been there for quite a while and we hope that people will proactively work on reducing their debt as much as possible and as quickly as possible,” she said, citing the central bank’s explanation for tightening Namibia’s monetary policy. In announcing the BoN’s monetary policy committee decision to raise the bank’s lending rate to commercial banks from 5.5% to 5.57%, Governor Ipumbu Shiimi cited concerns over rising inflation and high levels of personal debt as the main reasons. WINDHOEK DENVER ISAACS