{"id":26617,"date":"2020-12-31T11:01:08","date_gmt":"2020-12-31T09:01:08","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=26617"},"modified":"2020-12-31T11:01:12","modified_gmt":"2020-12-31T09:01:12","slug":"psce-november-2020","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-november-2020\/","title":{"rendered":"PSCE \u2013 November 2020"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

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

Private sector credit (PSCE) increased by N$1.09 billion or 1.05% m\/m in\nNovember, bringing the cumulative credit outstanding to N$104.68 billion. On a\nyear-on-year basis, private sector credit increased by 2.31% in November,\ncompared to 1.65% y\/y in October. On a rolling 12-month basis, N$2.37 billion\nworth of credit was extended to the private sector. Of this cumulative\nissuance, individuals took up N$2.38 billion while corporates took up N$321.6\nmillion. The non-resident private sector decreased their borrowings by N$337.8\nmillion.<\/p>\n\n\n\n

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

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

Credit extended to individuals increased by 0.7% m\/m and 4.1% y\/y in\nNovember, growing at a slightly slower pace than the 4.2% y\/y increase recorded\nin October. The month-on-month growth has mostly been driven by an increase in\noverdrafts which grew by 5.8% m\/m and 9.4% y\/y indicating continued use of\nshort-term credit by individuals. The uptake of longer-term credit agreements\nlike mortgages and instalment credit by individuals continued to slow. The\nvalue of mortgage loans extended to individuals rose by only 0.4% m\/m and 4.4%\ny\/y. Instalment credit grew by 0.4% m\/m but was down 4.1% y\/y as new vehicle\nsales continue to dwindle.<\/p>\n\n\n\n

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

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

Credit extended to corporates grew by 1.5% m\/m after increasing by 0.7%\nm\/m in October. On an annual basis, credit extended to corporates rose by a\nmere 0.7% y\/y. As was the case with credit extension to individuals, the month-on-month\ngrowth in corporate credit was primarily driven by increased uptake in\noverdraft facilities which registered growth of 7.7% m\/m and 15.0% y\/y. The\nBank of Namibia (BoN) attributed this to a rise in demand for overdrafts by businesses\noperating in the wholesale and retail trade sector as well as the agriculture\nsector. Mortgage loans to corporates increased by 0.8% m\/m but declined by 7.2%\ny\/y. Instalment credit extended to corporates, which has been contracting since\nFebruary 2017 on an annual basis, remained depressed, contracting by 1.2% m\/m\nand 17.2% y\/y in November, the lowest level since early 2019.<\/p>\n\n\n\n

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

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

The overall liquidity position of\ncommercial banks deteriorated during November, contracting by N$764.5 million\nto reach an average of N$2.34 billion during the month. According to the BoN,\nthe decline can mainly be attributed to cross-border transfers, funds mainly\ndesignated for investments. <\/p>\n\n\n\n

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

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

As per the BoN\u2019s\nlatest money statistics release, broad money supply rose by N$9.90 billion or\n8.5% y\/y in November. Foreign reserve balances fell by N$3.84 billion or 11.2%\nm\/m to N$30.52 billion in November. The BoN ascribes the decline to net\ngovernment payments, foreign currency purchases by commercial banks and exchange\nrate revaluations during the period.<\/p>\n\n\n\n

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

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

Private sector credit extension growth remained subdued at the end of November. While 12-month cumulative issuance rose to N$2.37 billion in November from N$1.68 billion in October, 12-month issuance is still down 57.3% y\/y. With economic conditions unlikely to improve materially in 2021, we expect the trend of reliance on short-term debt by both consumers and businesses to continue. With corporates continuing to repay their longer-term debt and de-levering their balance sheets, we are unlikely to see meaningful growth in private sector credit extension and could even see a contraction on an annual basis in the coming months.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Private sector credit (PSCE) increased by N$1.09 billion or 1.05% m\/m in November, bringing the cumulative credit outstanding to N$104.68 billion. On a year-on-year basis, private sector credit increased by 2.31% in November, compared to 1.65% y\/y in October. On a rolling 12-month basis, N$2.37 billion worth of credit \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-26617","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\/26617","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=26617"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/26617\/revisions"}],"predecessor-version":[{"id":26624,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/26617\/revisions\/26624"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=26617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=26617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=26617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}