{"id":26100,"date":"2020-11-02T16:16:01","date_gmt":"2020-11-02T14:16:01","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=26100"},"modified":"2020-11-02T16:16:01","modified_gmt":"2020-11-02T14:16:01","slug":"psce-september-2020","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-september-2020\/","title":{"rendered":"PSCE \u2013 September 2020"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Total credit\nextended to the private sector (PSCE) decreased by N$106.9 million or 0.1% m\/m\nin September, bringing the cumulative credit outstanding to N$102.88 billion.\nOn a year-on-year basis private sector credit extension increased by only 1.5%\ny\/y in September, compared to 2.2% growth recorded in August. This represents the\nlowest level of annual growth on our records dating back to 2002. N$2.80\nbillion worth of credit has been extended to individuals on a 12-month\ncumulative basis, while corporates and the non-resident private sector\ndecreased their borrowings by N$943.7 million and N$372.3 million,\nrespectively.<\/p>\n\n\n\n

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

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

Credit\nextended to individuals increased by 0.5% m\/m and 5.0% y\/y in September. The\nmonth-on-month growth has mostly been driven by an increase in \u2018other loans and\nadvances\u2019 (or OLA, which is made up of credit card debt, personal and term\nloans) which grew by 1.4% m\/m and 14.0% y\/y in August, indicating continued\nreliance on short-term credit by individuals. Overdraft facilities extended to\nindividuals increased by 0.7% m\/m and 4.2% y\/y. Instalment credit and leasing\ntransactions remained steady m\/m, but contracted by 5.2% y\/y. The value of\nmortgage loans extended to individuals grew by 0.3% m\/m and 4.8% y\/y. <\/p>\n\n\n\n

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

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

Credit\nextended to corporates contracted by 0.8% m\/m and 2.2% y\/y in September,\nfollowing the low growth of 1.8% m\/m and 0.4% y\/y in August. Bar overdrafts, all\ncategories recorded declines on a month-on-month basis. Mortgage\nloans to corporates declined by 1.0% m\/m and 8.9% y\/y. Instalment credit\nextended to corporates, which has been contracting since February 2017 on an\nannual basis, remained depressed, contracting by 2.5% m\/m and 15.6% y\/y in September.\nOverdrafts to corporates remained steady m\/m, but increased by 3.7% y\/y.<\/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 remained relatively unchanged, declining by only N$10.1 million to reach\nan average of N$2.22 billion. The Bank of Namibia states that this is due to\ntwo opposing effects of higher Government payments which were partially offset\nby an increase in South African Rand currency outflows during the month. The\noutstanding balance of repo\u2019s fell from N$882.8 million at the start of\nSeptember to N$116.0 million by month end.<\/p>\n\n\n\n

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

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

Broad money supply\nrose by N$12.7 billion or 11.2% y\/y in September, as per the BoN\u2019s latest\nmonetary statistics release. Foreign reserve balances declined by N$2.01\nbillion or 2.2% m\/m to N$32.7 billion in September. The BoN attributes the\ndecrease to higher government foreign payments, as well as an increase in\ncommercial bank outflows during the month.<\/p>\n\n\n\n

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

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

Private sector credit extension growth remains subdued at the end of September, slowing from 2.2% y\/y to 1.5% y\/y in September. Rolling 12-month issuance fell to N$1.48 billion and is down a rather staggering 75.1% from the N$5.95 billion figure as at September 2019. <\/p>\n\n\n\n

The data clearly shows that while the various rate cuts\nby the BoN would have provided relief to those who are heavily indebted, it did\nnot spur on additional credit uptake, as we predicted. The heightened uptake of\nshort-term personal debt and overdrafts is a sign of a stretched consumer, many\nof whom will have been negatively impacted by the effect of the pandemic and\nresultant lockdowns. As economic activity is expected to remain depressed for\nquite some time, we do not expect to see a recovery in credit extension in the\nshort term. Corporates continue to delever, indicating that they are not preparing\nto invest in capital expansion projects anytime soon, which makes sense given\nthe current economic climate.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Total credit extended to the private sector (PSCE) decreased by N$106.9 million or 0.1% m\/m in September, bringing the cumulative credit outstanding to N$102.88 billion. On a year-on-year basis private sector credit extension increased by only 1.5% y\/y in September, compared to 2.2% growth recorded in August. This represents \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-26100","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\/26100","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=26100"}],"version-history":[{"count":2,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/26100\/revisions"}],"predecessor-version":[{"id":26108,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/26100\/revisions\/26108"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=26100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=26100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=26100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}