WINDHOEK — A recent report by the Old Mutual Financial Services Monitor (OMFSM) has revealed that 40% of working Namibians currently have personal loans with various banking institutions across the country.
According to the Namibia Press Agency (Nampa), these loans primarily address unforeseen needs, with 47% of borrowers citing this reason. Other common purposes include paying off existing debts (38%), managing daily expenses (36%), and specific purchases. Notably, education, home maintenance, burial, and medical expenses rank as the top reasons for acquiring personal loans. The report provides critical insights into the financial behaviors of employed Namibians, who make up about 28% of the population aged between 18 and 65 years, with a monthly income of N.dollars 3,000 or more, residing in urban and peri-urban localities.
Only a quarter of the working population feels confident about Namibia’s economic future, underscoring the prevailing sentiment of economic difficulty. However, the report identifies a positive financial outlook among Namibians, with 58% anticipating improvement in their personal finances, indicating a resilient attitude in the face of economic challenges.
The OMFSM further notes a downturn in income levels, with 75% of working Namibians reporting stagnant or reduced earnings compared to three years prior. Moreover, 42% of consumers are dealing with considerable financial stress, exacerbated for lower-income earners due to extended family support responsibilities lingering from the pandemic’s impact.
The report underscores the primacy of income security, along with cost-cutting and debt repayment as top financial priorities. It also reveals an increased focus on emergency savings, reflecting a growing consciousness about financial preparedness.
Household expenditures in Namibia, with living costs consuming 48% and debt servicing accounting for 19% of budgets, are comparable to the proportion allocated for savings, according to the study.