September household overdrafts beaten by celebratory August

Unlike in August where household overdrafts led the overall overdraft credit, August saw the boom in overdrafts by businesses.

08 November 2018 | Economics


The higher growth in overdraft credit in August was due to an increase in the uptake of overdrafts by the household sector.

However, latest money and banking statistics from the Bank of Namibia (BoN) show that the annual growth in total overdraft credit during the month of September was due to higher demand for overdraft credit by the business sector during the month of September.

In Namibia, August is known to be one of the most celebratory months, with some of the country’s biggest events taking place that month - from weddings to the Olufuko cultural festival and the Ongwediva Trade Fair.

During a recent media conference at the central bank, BoN governor Ipumbu Shiimi called on Namibians to stop borrowing for consumption and rather borrow for productive purposes such as business loans over personal loans.

Earlier data from the central bank showed that growth in overdraft credit grew to reach 1.3% at the end of August, boosted by household demand.

In September, however, although growth in overdraft credit grew, the demand was not led by households but by the business sector.

In fact, credit extended to the household sector slowed at the end of September 2018.

Last week’s statistics from the central bank show that growth in household credit slowed to 6.9% from 7.5% reported at the end of August.

The reduced growth in credit extended to the household sector was underpinned by lower uptake of mortgage credit, coupled with continued contractions in instalment credit during September.

This is unlike August, when growth in credit extended to the household sector boomed on the back of the major credit categories including overdrafts. The exception was instalment sales, which contracted during that period.

While Private Sector Credit Extension (PSCE) rose at the end of August compared to the month before, the annual growth in PSCE did not rise during the month of September.

In fact, the annual growth in PSCE stood at 6.6% at the end of September 2018, maintaining the same rate as in August 2018.

Business credit boom

As if the nation was listening to the call by the central bank to prioritise business credit over individual credit, growth in total credit extended to businesses continued an upward trend during September 2018.

Not only did business overdrafts in September top overdrafts, but the annual growth in credit extended to businesses stood at 6% the end of September 2018, compared to 5.2% at the end of the preceding month.

The increased growth was driven by an increased demand for commercial property mortgages coupled with an increased demand for overdraft credit and other loans and advances credit.

The reasons for September’s business credit boost were different from those of August, when commercial and term loans extended to the agricultural sector accounted for most of the business credit growth.

Other latest numbers

Other details on credit and contained in the latest central bank report is that annual growth in other loans and advances (such as personal and commercial loans and credit cards) increased slightly during September 2018. The annual growth in other loans and advances increased by 0.6 percentage point to reach 20.1% at the end of September 2018. The higher growth was reflected in the increased demand for this credit category by both the household and corporate sectors, although most notably the corporate sector

Instalment sales continued to decline during the period under review. Annual growth in instalment sales contracted to 6.2% at the end of September 2018. Although recording an improved contraction of 0.2 percentage point growth, instalment sales remained weak, in line with a decline number of vehicles sold.

The annual growth in mortgage credit extended to the private sector remained relatively the same at the end of September 2018 compared to August 2018. On an annual basis, growth in mortgage credit remained at 7.2% at the end of September 2018, similar to August 2018. The steady growth was supported by mortgage loans extended to the business sector, specifically for the purposes of commercial property developments.

Similar News


Xi’s bad year clouds China's celebrations

1 day - 22 August 2019 | Economics

Helen Roxburgh - It was meant to be an unabashed celebration of the triumph of Communism in China, and of president Xi Jinping's authority as...

Solar-irrigated farms face hungry elephants

1 day - 22 August 2019 | Economics

Lungelo Ndhlovu - When one of Zimbabwe's first solar mini-grid systems was installed in this drought-prone village near the Botswana border in 2016, residents thought...

SA inflation dips as growth slows

1 day - 22 August 2019 | Economics

South Africa's inflation last month dipped to 4.0%, its lowest level since January, the statistics agency said yesterday. In June, inflation was 4.5%.The decline was...

Water pollution an 'invisible threat' to global goals

1 day - 22 August 2019 | Economics

Kim Harrisberg – Water pollution threatens nearly all the globally agreed development goals to end environmental destruction, poverty and suffering by 2030, economists warned in...

'Insolvent' NBC wants bigger bailout

2 days ago - 21 August 2019 | Economics

The NBC needs N$313.2 million and N$4 million respectively from government to pay its outstanding liability in the form of post-medical aid benefits and severance...

Ghana cashes in on slave heritage tourism

2 days ago - 21 August 2019 | Economics

Alessandra Prentice and Siphiwe Sibeko - In a clearing at the turnoff to Assin Manso, a billboard depicts two African slaves in loincloths, their arms...

Recognising traditional authorities ‘costly’

2 days ago - 21 August 2019 | Economics

GOBABIS - President Hage Geingob said the constant applications for the recognition of traditional authorities is financially unsustainable for government and causes tribal division.Speaking at...

Africa Briefs

2 days ago - 21 August 2019 | Economics

SA: No 'big bang' approach to nuclearSouth Africa will not adopt a "big bang" approach to building new nuclear power capacity but instead add capacity...

US economists expect recession in 2020 or 2021

2 days ago - 21 August 2019 | Economics

Washington - A majority of economists expect a US recession in the next two years, but have pushed back the onset amid Federal Reserve actions.A...

White House mulling tax cut

2 days ago - 21 August 2019 | Economics

Washington - The White House is considering cutting taxes or reversing tariffs to head off a recession, US media reported yesterday, despite president Donald Trump's...

Latest News

Soldier charged with shebeen burglaries

19 hours ago | Crime

A member of the Namibia Defence Force has been arrested in connection with burglaries at six shebeens at Okakango location in Ondangwa.Operation Kalahari members have...

Letting the big fish swim

19 hours ago | Columns

Prosecutor-General Martha Imalwa has opened a Pandora's Box, following her revelations this week that any hopes of Namibia recovering the over N$600 million lost in...

Swapo threatened with court action

19 hours ago | Politics

Five Swapo members have threatened to take the party to court if their demand for the re-run of the Otjiwarongo district renewal of mandate process...

Dumpsite scramble

19 hours ago | Environment

Several municipalities are moving fast to comply with the ministry of environment's new regulations, which require towns to obtain environmental clearance certificates for their dumpsites.So...

Khomas elects Swapo 'pot' contenders

19 hours ago | Politics

The Swapo leadership in the Khomas Region have elected businesswoman Martha Namundjebo-Tilahun and 30-year-old City of Windhoek councillor Ian Subasubani to stand as National Assembly...

Land acquisition fund deemed unnecessary

19 hours ago | Agriculture

The Parliamentary Standing Committee on Public Accounts Committee questioned the existence of the Land Acquisition and Development Fund because government already has a finance system...

Certified royalty

19 hours ago | Art and Entertainment

King Tee Dee, formerly known as The Dogg, is an artist who has come full circle. After many years spent dominating the music scene by...

Battling creative exhaustion

19 hours ago | Columns

We have all heard this advice before - we can't continue to be productive and creative if we exhaust ourselves, or if we fail to...

The Fashion Soireè returns

19 hours ago | Art and Entertainment

Hosted by three of Namibia's fashion darlings; Reinhard Mahalie, Jay Aeron and Rumano Fabrishh, The Fashion Soireè is the first of its kind in Namibia.More...

Load More