Year-on-year credit extended wanes
The total value of loans taken up in 2017 is slightly down when this is compared to the total value of loans taken up in 2016
The total value of loans extended to consumers and businesses is on a downward trend when compared to 2016 data the latest Private Sector Credit Extension report prepared by IJG is showing.
From a rolling 12-month basis, total credit extended to the private sector has been trending downward with N$3.82 billion worth of credit extended over the last 12 months. Compared to last year, the rolling 12-month issuance is down 48% from the N$7.39 billion issuance observed at the end of November 2016.
PSCE increased by N$584.5 million or 0.7% month-on-month in November, bringing the cumulative credit outstanding to N$89.4 billion. On a year-on-year basis, private sector credit extension increased by 4.5% in November, slowing from the 5.1% growth recorded in October.
Of this cumulative issuance, individuals took up credit worth N$3.4 billion while N$468.1 million was issued to corporates.
“Of the total credit extended to the private sector over the last 12 months, individuals helped themselves to around 90% of the pie. Corporates had a trying year, especially those that endured slow payment from government for work done,” IJG said.
According to IJG, the private sector extended data showed that the desire for loans was not as strong as in the previous year. This was as a result of low consumer and business confidence.
“Weakened consumer and business confidence in the wake of a weak economy has resulted in a low demand for credit, which has been further exacerbated by tighter credit regulations,” IJG said.
Banks too were becoming very selective with the loans they were extending.
“Improved commercial bank liquidity indicates that the supply side for credit has boasted healthy loanable balances although banks have been more selective in credit issuance too,” IJG said.
Inflation slowed throughout the year, providing optimism for easing monetary policy which was rewarded with only one rate cut of 25 basis points.
STAFF REPORTER
From a rolling 12-month basis, total credit extended to the private sector has been trending downward with N$3.82 billion worth of credit extended over the last 12 months. Compared to last year, the rolling 12-month issuance is down 48% from the N$7.39 billion issuance observed at the end of November 2016.
PSCE increased by N$584.5 million or 0.7% month-on-month in November, bringing the cumulative credit outstanding to N$89.4 billion. On a year-on-year basis, private sector credit extension increased by 4.5% in November, slowing from the 5.1% growth recorded in October.
Of this cumulative issuance, individuals took up credit worth N$3.4 billion while N$468.1 million was issued to corporates.
“Of the total credit extended to the private sector over the last 12 months, individuals helped themselves to around 90% of the pie. Corporates had a trying year, especially those that endured slow payment from government for work done,” IJG said.
According to IJG, the private sector extended data showed that the desire for loans was not as strong as in the previous year. This was as a result of low consumer and business confidence.
“Weakened consumer and business confidence in the wake of a weak economy has resulted in a low demand for credit, which has been further exacerbated by tighter credit regulations,” IJG said.
Banks too were becoming very selective with the loans they were extending.
“Improved commercial bank liquidity indicates that the supply side for credit has boasted healthy loanable balances although banks have been more selective in credit issuance too,” IJG said.
Inflation slowed throughout the year, providing optimism for easing monetary policy which was rewarded with only one rate cut of 25 basis points.
STAFF REPORTER
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