The rate at which Namibians are taking out personal loans to support consumption is worrying, Namibia’s central bank said Wednesday.
Speaking at a press conference, Bank of Namibia governor Ipumbu Shiimi said the percentage of people borrowing for personal loans is rising and is currently in the region of 23 percent.
“We have seen because of the pressure in the economy, people are now resorting to short term debt. It looks like people are still borrowing to support their consumption activities that is why they are taking all these short term loans,” he said.
“I don’t believe that it is sustainable to continue funding our lifestyles with short term loans especially consumption loans. My advice again, is people should cut where they need to cut and don’t engage in debt,” he added.
Shiimi said the bank is concerned that the borrowing will cause problems for the economy.
“I am equally concerned as you are on personal loans and short term loans in the form of credit cards. It will create problems for you as a borrower, for the lender and the economy,” he said.
He advised Namibians to cut on their spending.
“Leave that lifestyle if you are not able to afford it,” he said. Enditem