Namibians borrow N$9.3bn from microlenders

Namibia’s microlending industry recorded a sharp increase in lending during the second quarter of 2026, with its total loan book growing by 27% in just three months to N$9.3 billion.

The total loan book value is the total amount of money that Namibians collectively owed microlenders at the end of June 2026.

The increase comes as households continue to face pressure from the cost of living, debt repayments and limited disposable income, driving demand for both short-term cash and longer-term credit.

According to the Namibia Financial Institutions Supervisory Authority (Namfisa), the industry’s loan book was also 19.3% higher than a year earlier.

Namfisa describes the increase as a “strong recovery” in microlending activity both quarter on quarter and year on year by the end of June.

Term loans accounted for the bulk of the outstanding debt.

The value of term loans increased by 28.7% during the quarter to N$8.6 billion, representing 92.3% of the industry’s total outstanding loan book.

The average term loan was N$28 973.

However, the number of new loans issued during the quarter was dominated by payday lending, which provides borrowers with smaller amounts of money that are generally repaid over a shorter period.

Payday lenders issued 170 902 new loans during the quarter, accounting for 94% of all new loans issued.

The average payday loan increased to N$4 329. Payday loans also accounted for 69% of the total money disbursed during the quarter, highlighting the extent to which borrowers are using smaller loans to access cash in the short term.

But the rapid expansion of lending comes alongside concerns about whether borrowers are being properly assessed before receiving credit.

Namfisa’s supervisory findings show that some microlenders were not able to demonstrate that the required affordability checks had been properly conducted.

In one inspection, the regulator found cases where loans had been granted “without the required supporting documents to demonstrate that affordability assessments had been carried out.”

Affordability assessments are intended to establish whether borrowers can afford to repay their loans after taking their existing financial obligations into account.

The finding raises concerns about the potential risks to consumers as the industry continues to expand.

Namfisa also reported that 52 registered entities, representing 4.1% of the total, were classified as Stage 5 entities under its supervisory intervention framework.

Microlenders accounted for 82.7% of these higher-risk entities. Namfisa says non-compliance among microlenders in the higher-risk stages generally involved failure to submit regulatory returns, non-payment of levies and a history of non-compliance.

The industry is also highly concentrated, with a relatively small number of lenders controlling large portions of the market.

Express Credit Cash Advance accounted for about 67.8% of the payday-loan book.

In term lending, Letshego Micro Financial Services Namibia had the largest market share at 28.7%, followed by Entrepo Finance at 26.7% and Old Mutual Finance at 22.7%.

The figures present a mixed picture of Namibia’s microlending industry.

On one side, the N$9.3 billion loan book shows that credit is reaching households on a much larger scale, with more than 170 000 payday loans issued during the quarter.

On the other, Namfisa’s supervisory findings raise questions about whether some borrowers are being given loans without sufficient evidence that they can afford to repay them.

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