{"id":25827,"date":"2020-10-02T15:14:53","date_gmt":"2020-10-02T13:14:53","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=25827"},"modified":"2020-10-02T15:14:54","modified_gmt":"2020-10-02T13:14:54","slug":"psce-august-2020","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-august-2020\/","title":{"rendered":"PSCE \u2013 August 2020"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Overall<\/strong><\/p>\n\n\n\n

Total credit extended to the private sector (PSCE)\nincreased by N$774.1 million or 0.76% m\/m in August, bringing the cumulative\ncredit outstanding to N$103.0 billion. On a year-on-year basis, private sector\ncredit extension increased by 2.2% in August, somewhat quicker than the 1.9%\ngrowth recorded in July. On a rolling 12-month basis N$2.23 billion was\nextended to the private sector, with individuals taking up N$2.41 billion while\nN$188.9 million was extended to corporates. The non-resident private sector decreased\nborrowings by N$366.7 million.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Individuals<\/strong><\/p>\n\n\n\n

Credit\nextended to individuals remained steady m\/m, but increased by 4.3% y\/y. The\nonly category which recorded positive growth on a monthly basis was mortgage\nloans, which grew by 0.3% m\/m and 4.4% y\/y. Over the last twelve months N$1.73\nbillion worth of mortgage loans were extended to individuals, making up the\nmajority of overall credit extended over the period. Instalment credit and\nleasing transactions (which have been combined as a category by the BoN)\ncontracted by 0.4% m\/m and 6.3% y\/y, also reflected in the low demand for new\nvehicles. The other loans and advances category, comprising of shorter-term\ncredit such as personal and card loans declined by 0.9% m\/m, but rose by 12.4%\ny\/y.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Corporates<\/strong><\/p>\n\n\n\n

Credit extended\nto corporates grew by 1.8% m\/m and 1.7% y\/y in August, following the 1.5% m\/m\nand 1.2% y\/y contraction in July. The growth was mostly driven by increased\ndemand of overdraft facilities by corporates, as the category recorded\nrelatively strong growth of 6.5% m\/m and 6.7% y\/y. Mortgage loans extended to\ncorporates contracted by 0.8% m\/m and 6.3% y\/y. The persistent contraction in\ninstallment credit continued in August, declining by 1.2% m\/m and 11.6% y\/y. Corporates\ncontinued to rely on short-term credit with the other loans and advances recording\ngrowth of 1.6% m\/m and 5.3% y\/y in August.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Banking Sector Liquidity <\/strong><\/p>\n\n\n\n

The overall liquidity position of commercial\nbanks declined by N$341.1 million in August to reach an average of N$2.23\nbillion. The Bank of Namibia attributed the decline to an increase in net ZAR\noutflows as well as investments into government debt instruments. The\noutstanding balance of repo\u2019s increase from N$429.8 million at the start of\nAugust to N$899.8 million by month end.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Reserves\nand Money Supply<\/strong><\/p>\n\n\n\n

As per the BoN\u2019s\nlatest money statistics release, broad money supply rose by N$12.6 billion or\n11.3% y\/y in August. Foreign reserve balances fell by N$2.01 billion or 5.7%\nm\/m to N$33.4 billion in August. According to the BoN, the decline in foreign\nreserves was mainly due to net Rand purchases by commercial banks as well as\nincreased foreign payments by the government during the month.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Outlook<\/strong><\/p>\n\n\n\n

As expected, the various rate cuts by the BoN thus far this year have not led to a significant increase in uptake of credit. With economic activity remaining very low and banks being prudent in extending credit, most of the credit uptake in August has been short-term borrowings by corporates. Continued reliance on short-term credit is a sign of businesses that are under financial pressure as short-term credit is not typically used to invest in capital projects. The uptake in mortgage loans by individuals is somewhat encouraging, although it could simply be that individuals are taking advantage of the low interest rate to borrow against their existing home loans as it is a relatively cheap source of funding. There are very few catalysts for economic growth at present, and as a result we do not expect to see a recovery in credit extension in the short term.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Total credit extended to the private sector (PSCE) increased by N$774.1 million or 0.76% m\/m in August, bringing the cumulative credit outstanding to N$103.0 billion. On a year-on-year basis, private sector credit extension increased by 2.2% in August, somewhat quicker than the 1.9% growth recorded in July. On a \u2026 Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,22],"tags":[],"class_list":["post-25827","post","type-post","status-publish","format-standard","hentry","category-economicresearch","category-psce"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/25827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/comments?post=25827"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/25827\/revisions"}],"predecessor-version":[{"id":25834,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/25827\/revisions\/25834"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=25827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=25827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=25827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}