Namibians’ appetite for borrowing grows
Namibians’ appetite for borrowing grew signaled by the growth in private sector credit extension in October compared to that recorded in the prior month, money and baking statistics released by Bank of Namibia show.
Private Sector Credit Extension (PSCE) rose to 7.1% y-o-y in October 2018 compared to a 6.6% y-o-y recorded in the prior month.
Brokerage firm, Simonis Storm Securities, this week reported that the uptick in the borrowing appetite stems from an uptake of short-term credit facilities by corporates in the services, fishing, manufacturing and mining sectors in October.
The debt was channeled through overdraft facilities coupled with other loans and advances that increased by 7.2% and 17.7%, respectively in October 2018.
Unsecured lending maintained an upward trend, increasing to 13.7% y-o-y in October 2018 compared to a 4.7% growth in the prior year.
On the domestic debt front, total domestic debt increased by 17.5% y-o-y in November 2018 but at a slower pace compared to a 24.0% that was registered in the prior year.
“This increase constitutes a 23.0% y-o-y increase in Treasury Bills (TB’s) and inflation-linked bonds that recorded a rise of 31.4% y-o-y in November 2018.,” says Simonis Storm Securities.
Bonds picked up steam in November 2018, increasing by 11.6%.
Said the firm, “We attribute the increase in domestic instruments to the repatriation of funds for domestic asset requirements coupled with excess liquidity from diamond sales.”