Rising prices push for more credit finance

Rising prices continued putting pressure on firms and households to get more credit to finance the same volumes of fuel, stock and vehicles in September. This has driven bank credit to businesses and households up by N$1. 06 billion to N$128. 2 billion with corporates accounting for N$656. 8 million (62% of the flow) and households N$403. 5 million. According to economic analysts Simonis Storm Securities, this resulted in the private sector credit extension rising to 5. 6% year on year (y/y) in September from 5. 4% in August, describing it as “the fastest pace since September 2025”. “Banks extended N$2. 68 billion in the third quarter, against N$2. 14 billion in the second quarter and N$1. 02 billion in the first quarter of the year,” Simonis says. Year to date, the book of bank credit has grown to N$5. 84 billion, 39% more than the N$4. 20 billion in the same nine months of 2025, the analysts say.

“Credit demand is recovering in nominal terms even as rates rise. Credit contracted N$443. 6 million in October 2025 before rebounding by N$619 million in November and N$808 million in December, so the base effect is concentrated in October. “Even ordinary lending of about N$500 million a month would lift private sector credit extension to about 6. 4% in October,” the analysts say. Simonis says household credit grew 4. 9% in September, unchanged from August, as the book rose N$403. 5 million to N$73. 6 billion, the fourth straight month of flows near N$400 million. With inflation at 5. 4%, household credit fell about 0. 5% in real terms, the second negative reading in a row, Simonis says. Mortgage growth rose to 3. 6% from 2. 8%, the fifth consecutive increase and the highest of 2026, adding N$199. 3 million to N$47. 5 billion. Some buyers may have moved before further rate hikes, but the book is…