NAMIBIAN HOUSEHOLD DEBT RISES TO 89.1 PCT OF INCOME

Mortgages, other loans and advances have caused household debt in namibia to rise to 89.1 per cent of disposable income as at end-2015 from 85.5 per cent a year earlier.

The Deputy Governor of the Bank of Namibia, said at the launch of the 2016 Financial Stability Report here Thursday that the trend in household debt would be closely monitored and suitable policy measures would be taken to keep its growth rate at sustainable levels.

As for corporate debt, Uanguta said the levels of such debt, especially in the mining sector, had increased on the back of both foreign and domestic private debt, coupled with the depreciation of the Namibian dollar.

The increase in corporate debt was largely ascribed to borrowing by both local and multinational enterprises to expand their operations, exacerbated by exchange rate depreciation.

He added that since credit extended to business was used for productive activities, it is anticipated that this may not pose a major risk to financial stability in the country.

"Similarly, the acceleration in the growth rate of large exposures in the banking sector, in sectors such as manufacturing and construction, does not pose a major risk to the financial system," he added.

On a positive note, the banking sector has been characterised by healthy profit levels and adequate capital. Banking institutions remained resilient and maintained capital and liquidity at levels higher than the minimum set by the Bank of Namibia, Uanguta said.

Source: Nam News Network