Namibians currently owe cash-loan businesses N$7.6 billion.
This amount is owed by 259 266 people.
This is according to the quarterly report of the Namibia Financial Institutions Supervisory Authority (Namfisa) on the non-banking financial sector.
"The microlending sector's loan book value declined by 6% quarter on quarter, but increased by 13% year on year, reaching N$7.6 billion by the end of the first quarter of 2025," notes the report.
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The quarterly contraction was driven by lower loan disbursements and a reduced number of new loans issued.
In the first three months of the year, cash loans disbursed amounted to N$1.4 billion.
On a quarterly basis there was a decline, however, an increase was noted on a yearly basis.
"The quarterly decline was driven by reduced lending transactions from term lenders. The year-on-year growth was supported by increased disbursements from term lenders and payday lenders," the report reads.
Term lenders accounted for 61% of the total disbursements, and payday lenders contributed the remaining 39%.
Term lenders offer loans that are repaid over a fixed period, typically months or years, while payday lenders offer short-term loans, usually due on the borrower's next payday (often two to four weeks).
According to the report, Namibians are on average borrowing N$30 530 from term lenders and N$3 857 from payday lenders.
"The average disbursement value for term lenders increased by 9.5% quarterly, but declined by 8% yearly during the same period. In contrast, the average disbursement for payday lenders decreased slightly by 0.5% quarterly, but rose significantly by 49.9% yearly," the report reads.
Additionally, the number of new loans disbursed declined on a quarterly basis but increased on a yearly basis, reaching 176 272 by the end of March.
Payday lenders dominated loan issuance, accounting for 84% of new loans, and term lenders contributed the remaining 16%.
Walvis Bay resident Renata Samuel says she has approached cash loans on two occasions, a decision she regrets to date. She says she went to cash loans after a friend gave her the idea.
She says the first time she went to a cash loan was in 2018 when she needed money to bail out her brother who was arrested for assault.
"We needed N$2 000 to bail him out, but as a family we only had N$500 so I had to get a cash loan for the rest of the money. I could not pay the full amount at the 30% interest rate in one month and the interest kept increasing the longer I took to pay it back," Samuel adds.
She says the second time was to help her landlord pay the water bill because the municipality had shut down their water.
"They took my identification document and ATM card. It is something I regret and I will never do it again. If I have debt, like school fees, I would rather owe the school because it does not accumulate interest like taking funds from a cash loan," she notes.
Old Mutual Namibia retail business marketing manager Ashante Manetti says one of the ways people can avoid taking out loans in the face of unexpected expenses is having an emergency fund.
"Build or top up an emergency fund to prepare for unforeseen expenses," she Manetti.
Manetti adds that saving money does not always have to begin with large amounts; it can be done by starting small. She says when it comes to budgeting, people should reflect on their financial journey over the past year to know where their weaknesses and strengths are as this will allow them to make informed financial decisions.
"Begin with small, realistic steps to which you can easily adhere to: commit to saving a specific percent of your monthly income, try to reduce unnecessary expenses, or study financial products matching your needs," Manetti adds.
Bank Windhoek credit executive Eddie King says budgeting, debt management and maintaining an emergency fund can help individuals manage their finances effectively.
"Effective budgeting forms the foundation of good financial health. It involves understanding your income, expenses and setting limits to ensure spending does not exceed your earnings," he says.
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King advises that individuals should start by tracking all expenses for a month to see where their money goes.
Thereafter, they can create a budget that prioritises necessary expenses like rent, utilities and food while allocating funds for savings and discretionary spending.
"Using budgeting apps or spreadsheets can simplify this process and provide a clear view of your financial status at any time," King notes.
For people already in debt, King says individuals can use the debt snowball method, focusing on paying off smaller debts first.
"This approach doesn't mean neglecting other debts; instead, it involves paying more than the minimum installment on smaller debts, gaining momentum as each is cleared before tackling larger ones," he says.
Another approach is the debt avalanche method, which prioritises debts with the highest interest rates.
Additionally, consolidating multiple debts into a single loan with a lower interest rate can be beneficial.
"This reduces the total interest paid and simplifies the management of monthly payments," the credit executive notes.
