Over 12 000 get loan repayment relief

By Hilary Mare

SINCE the effective implementation of the debt relief measure on April 1 by the Bank of Namibia (BoN), the banking industry received a total of 22 506 applications for repayment holidays for the period up to July 2020 which declined to 19 308 as at September 30.

This was said by the BoN Governor, Johannes !Gawaxab who last week further stated that the total loans approved in volumes increased from 10 071 in July to 12 170 at the end of September.

“Since the implementation of these measures in March/April 2020, the banking industry has collectively approved most of its clients’ request for repayment holidays, especially for individuals and sectors hit hardest by Covid-19,” !Gawaxab said.

Applications approved originated from various sectors of the economy impacted by the Covid-19 pandemic.

The number of loan approvals per the top five sectors indicated that individuals dominated the approvals with 8 101 up to September from 6 563 recorded on July 15, followed by real estate and business services sector with 1 258 for September, an increase from 1 263 from July.

Trade, tourism, and hospitality sector stood at 1 028 during September, up from 896 recorded in July, while the transport sector stood at 428 loan approvals during September, which is higher than the 392 recorded in July.

Construction stood at 385 loan approvals for September up from 324 recorded in July 2020.

“Banks also received 34 new applications from mining companies amounting to N$391.6 million during the period to September 2020. Other sectors that were granted loans as at 31 September 2020 were agriculture sector with 194 approvals, electricity, gas and water sector which stood at 98 approvals, finance and insurance at 157 approvals, Government services at 31 approvals, manufacturing at 114 approvals, wholesale and retail sector at 17 approvals, fishing sector received nine approvals while the others sectors were allocated 316 approvals.”

!Gawaxab went on say that BoN working within its mandate and using the monetary policy and regulatory tools at its disposal, is committed to limiting the impact of the pandemic on the economy.

“To date, we have significantly reduced the repo rate which is presently standing at 3.

75 percent the lowest in the history of independent Namibia. The low interest rate will make it easier for borrowers to meet their financial obligations and the lower cost of capital will make investments much more attractive, if not compelling.

“We have allowed banks to grant payment holidays and have provided other relief measures to banks to expand lending. Moreover, the bank was instrumental in setting up the Credit Guarantee Scheme, assisting the Ministry of Finance in establishing a SME-specific Covid-19 relief scheme and providing sound policy advice where and when required to support the Namibian economy,” he explained.