Photo: AndreyPopov
By: Nghiinomenwa-vali Hangala
In the midst of income squeezes as the cost of living increases, commercial banks are also scrutinising loan applications for affordability to avoid an increase in non-performing loans, as a form of responsible lending.
Bank Windhoek’s Executive Officer for Retail Banking Services, Leon Koch, who spoke during the bank’s launch of its vehicle and asset finance campaign, acknowledged the pressure on customers.
Saying that transport inflation at 14.9% in September, fuel prices were roughly 30% above last year’s price, the repo rate at 7.00% and the prime lending rate at 10.50% after the recent 25-basis-point increase.
He, however, noted that despite the cost squeeze, which can reduce households’ and businesses’ ability to repay, responsible lending will not be the barrier to accessing capital.
He explained that clients will access capital that fits their budgets.
“Responsible lending does not hold growth back; it makes growth sustainable. We help customers choose a vehicle that fits their entire budget, including fuel, insurance and maintenance,” he said.
The book of bank credit to businesses and households grew by N$1.1 billion to N$128.2 billion at the end of September 2026.
Businesses borrowed N$656.8m (62% of the flow) and households N$403.5m.
Banks extended N$2.68 billion in Q3, against N$2.14 billion in Q2 and N$1.02 billion in Q1.
Year to date, the book has grown to N$5.84 billion, up 39% from N$4.20 billion in the same nine months of 2025.
According to Simonis Storms, credit demand is recovering in nominal terms even as rates rise.
Rising prices explain much of the higher nominal demand, as firms and households need more credit to finance the same volume of fuel, stock and vehicles.
Household credit grew 4.9% in September, unchanged from August, as the book rose N$403.5m to N$73.6bn, the fourth straight month of flows near N$400m.
However, with inflation at 5.4%, household credit fell about 0.5% in real terms, the second consecutive negative reading, according to Simonis Storm.
Instalment and leasing credit for households grew 15.6% (+N$119.5m) to N$10.0bn, the fastest household instrument in every month this year.
Business credit growth rose to 6.7% in September from 5.9%, the fastest since February.
The book grew by N$656.8 million to N$54.6 billion, after N$1,5 billion in August.
According to Simonis Storm’s analysis, businesses now account for N$3.4bn of the N$6.8bn of new credit over the past year.
Business installment and leasing, which has been driving credit growth, has eased to 17.9% from 22.6%, the lowest this year and a fourth straight slowdown from May’s 31.7% peak.
Simonis Storm attributes the fleet and equipment financing decline to the increase in interest rates.
Bank Windhoek remains the leading player in the instalment sale and leasing market.
Between January and September 2026, Namibia recorded 12,254 new vehicle sales, up 12.4% on the same period last year and the strongest nine-month performance since 2015.
September 2026 alone delivered 1,498 units, 14.9% more than a year earlier, while twelve-month sales reached 15,901 units, the highest since 2016.
Growth was broad-based. Commercial vehicle sales rose 14.8% year to date, and heavy commercial sales hit a record 667 units.
In August, installment sales and leasing credit expanded by 18.7% year on year, making vehicle finance one of the leading drivers of credit growth in the economy.
erastus@thevillager.com.na
