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Economic agents u2018reluctantu2019 on credit uptake
Economic agents u2018reluctantu2019 on credit uptake

Economic agents ‘reluctant’ on credit uptake

In December 2021, the central bank decided to leave the repo rate unchanged at 3.75% and it is on par with South Africa.
Phillepus Uusiku
PHILLEPUS UUSIKU

Statistics released by the Bank of Namibia (BoN) indicated that private sector credit extension (PSCE) growth slowed to 1.7% year-on-year in November 2021 from 2.7% year-on-year in October 2021.

Overall credit growth edges lower due to reduced demand for long-term debt and repayments on short-term debt mainly from businesses in the commercial retail and manufacturing sectors, the centra bank said.

Household debt increased by 2.6% year-on-year in November 2021, compared to 2.8% in the prior month, while corporate debt increased by 0.6% year-on-year in November 2021 compared to 3.0% year-on-year in the prior month.

Household debt stock increased from N$60.2 billion in November 2020 to N$61.7 billion November 2021. The biggest contributors to household credit growth were mortgages, increasing by 3.4% year-on-year in November 2021 compared to 3.2% year-on-year in the prior month and other loans and advances, increasing by 2.3% year-on-year in November 2021 compared to 2.6% year-on-year in the prior month, BoN said.

Corporate debt stock increased marginally from N$44.2 billion in November 2020 to N$44.5 billion in November 2021. The biggest contributors to corporate credit growth were instalment and leasing credit, increasing by 7.9% year-on-year in November 2021 compared to in the prior month and mortgage loans, increasing by 3.4% year-on-year in November 2021 compared to 6.1% year-on-year in the prior month). Other loans and advances, increased by 2.3% year-on-year in November 2021 compared to 0.9% year-on-year in the prior month, BoN added.

According to Simonis Storm (SS), “year to date, annual credit growth has averaged 2.4%, whereas we forecasted 2.5% average annual credit growth for 2021.” Naturally, this is indicative of slow economic recoveries in lost jobs and business closures since last year.

The current economic environment does not bode well for consumer or business confidence, hence demand for credit wanes. “Owing to a better economic recovery expectation in 2022, we forecast average annual credit growth of 2.6% in 2022,” SS said.

Green energy

Simonis Storm notes that Bank Windhoek issued its Green Bond in December 2018 and helped fund six renewable energy projects in Namibia. These six projects, mainly solar, cost a total of N$66 million with an estimated 15.6 GWh electricity generation in twelve months’ time.

The Green Bond matured on 6 December 2021, with most investors of the green bond being interested to also invest in Bank Windhoek’s Sustainability Bond, SS said.

Local banks have advanced loans to retail clients as well, who look at investing in renewable energy technology for small scale projects however, these loans were priced at market interest rates.

Banks generally are expecting a lot of interest from the private sector in anticipation of government’s green hydrogen project, but also due growing focus and concerns on Environmental, Governance and Social (ESG) related projects in Namibia, SS emphasised.

Another green debt initiative in Namibia includes the Solar Revolving Fund (SRF) which is administrated solely by the Ministry of Mines and Energy. The SRF is a credit facility which aims to provide greater access to renewable energy technologies in rural areas, especially for communities living in off-grid areas and urban clients.

Loan applicants must be Namibian citizens, between 21 and 55 years old and whose loans do not exceed three months’ basic salary. The SRF has a list of registered energy service providers from whom applicants must use and products include a maximum loan amount of N$60 000 for solar water pumps, N$6 000 – N$60 000 solar home systems and N$35 000 for solar water heaters.

“We believe that much room for growth and product innovation exists in the local green debt space. However, a key product feature would be to offer concessionary loans in order to incentivise behaviour change or energy conversion.”

“This would lower the cost of investing in renewable energy technologies in both the wholesale and retail segment in Namibia and would incentivise to undertake decarbonisation investments. While significant achievements have been made thus far, we believe there is further growth opportunities for green debt as climate change, decarbonisation and renewable energy will likely remain important themes in 2022,” SS [email protected]

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Namibian Sun 2024-11-07

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Premier League: Fulham 2 vs 1 Brentford Katima Mulilo: 22° | 36° Rundu: 20° | 31° Eenhana: 21° | 31° Oshakati: 21° | 31° Ruacana: 20° | 31° Tsumeb: 19° | 26° Otjiwarongo: 18° | 23° Omaruru: 20° | 32° Windhoek: 17° | 29° Gobabis: 19° | 28° Henties Bay: 16° | 22° Wind speed: 19km/h, Wind direction: SW, Low tide: 12:28, High tide: 06:39, Low Tide: 00:56, High tide: 18:52 Swakopmund: 15° | 18° Wind speed: 19km/h, Wind direction: W, Low tide: 12:26, High tide: 06:37, Low Tide: 00:54, High tide: 18:50 Walvis Bay: 15° | 24° Wind speed: 23km/h, Wind direction: W, Low tide: 12:26, High tide: 06:36, Low Tide: 00:54, High tide: 18:49 Rehoboth: 20° | 30° Mariental: 22° | 35° Keetmanshoop: 24° | 36° Aranos: 20° | 34° Lüderitz: 14° | 24° Ariamsvlei: 22° | 36° Oranjemund: 15° | 24° Luanda: 25° | 27° Gaborone: 19° | 27° Lubumbashi: 17° | 33° Mbabane: 13° | 24° Maseru: 12° | 25° Antananarivo: 14° | 30° Lilongwe: 22° | 29° Maputo: 19° | 26° Windhoek: 17° | 29° Cape Town: 17° | 22° Durban: 16° | 23° Johannesburg: 15° | 26° Dar es Salaam: 26° | 31° Lusaka: 20° | 31° Harare: 17° | 30° Currency: GBP to NAD 22.42 | EUR to NAD 18.69 | CNY to NAD 2.42 | USD to NAD 17.32 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.25 | EGP to NAD 0.34 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.63 | ZWL to NAD 0.04 | BRL to NAD 3.03 | RUB to NAD 0.18 | INR to NAD 0.21 | USD to DZD 132.78 | USD to AOA 909.05 | USD to BWP 13.4 | USD to EGP 49.22 | USD to KES 129.2 | USD to NGN 1680.41 | USD to ZAR 17.32 | USD to ZMW 27.07 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1858.03 Down -1.09% | Casablanca Stock Exchange (CSE) MASI 14296.93 Down -0.02% | Egyptian Exchange (EGX) 30 Index 31045.26 Up +0.82% | Botswana Stock Exchange (BSE) DCI 9878.53 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 698.14/OZ UP +1.28% | Copper US$ 4.41/lb UP +4.38% | Zinc US$ 3 071.00/T UP 0.28% | Brent Crude Oil US$ 76.16/BBP UP +0.87% | Platinum US$ 990.99/OZ UP +0.68% Sport results: Premier League: Fulham 2 vs 1 Brentford Weather: Katima Mulilo: 22° | 36° Rundu: 20° | 31° Eenhana: 21° | 31° Oshakati: 21° | 31° Ruacana: 20° | 31° Tsumeb: 19° | 26° Otjiwarongo: 18° | 23° Omaruru: 20° | 32° Windhoek: 17° | 29° Gobabis: 19° | 28° Henties Bay: 16° | 22° Wind speed: 19km/h, Wind direction: SW, Low tide: 12:28, High tide: 06:39, Low Tide: 00:56, High tide: 18:52 Swakopmund: 15° | 18° Wind speed: 19km/h, Wind direction: W, Low tide: 12:26, High tide: 06:37, Low Tide: 00:54, High tide: 18:50 Walvis Bay: 15° | 24° Wind speed: 23km/h, Wind direction: W, Low tide: 12:26, High tide: 06:36, Low Tide: 00:54, High tide: 18:49 Rehoboth: 20° | 30° Mariental: 22° | 35° Keetmanshoop: 24° | 36° Aranos: 20° | 34° Lüderitz: 14° | 24° Ariamsvlei: 22° | 36° Oranjemund: 15° | 24° Luanda: 25° | 27° Gaborone: 19° | 27° Lubumbashi: 17° | 33° Mbabane: 13° | 24° Maseru: 12° | 25° Antananarivo: 14° | 30° Lilongwe: 22° | 29° Maputo: 19° | 26° Windhoek: 17° | 29° Cape Town: 17° | 22° Durban: 16° | 23° Johannesburg: 15° | 26° Dar es Salaam: 26° | 31° Lusaka: 20° | 31° Harare: 17° | 30° Economic Indicators: Currency: GBP to NAD 22.42 | EUR to NAD 18.69 | CNY to NAD 2.42 | USD to NAD 17.32 | DZD to NAD 0.13 | AOA to NAD 0.02 | BWP to NAD 1.25 | EGP to NAD 0.34 | KES to NAD 0.13 | NGN to NAD 0.01 | ZMW to NAD 0.63 | ZWL to NAD 0.04 | BRL to NAD 3.03 | RUB to NAD 0.18 | INR to NAD 0.21 | USD to DZD 132.78 | USD to AOA 909.05 | USD to BWP 13.4 | USD to EGP 49.22 | USD to KES 129.2 | USD to NGN 1680.41 | USD to ZAR 17.32 | USD to ZMW 27.07 | USD to ZWL 321 | Stock Exchange: JSE All Share Index Same 0 | Namibian Stock Exchange (NSX) Overall Index 1858.03 Down -1.09% | Casablanca Stock Exchange (CSE) MASI 14296.93 Down -0.02% | Egyptian Exchange (EGX) 30 Index 31045.26 Up +0.82% | Botswana Stock Exchange (BSE) DCI 9878.53 Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 698.14/OZ UP +1.28% | Copper US$ 4.41/lb UP +4.38% | Zinc US$ 3 071.00/T UP 0.28% | Brent Crude Oil US$ 76.16/BBP UP +0.87% | Platinum US$ 990.99/OZ UP +0.68%