Private sector credit extension in Namibia pushed higher in September, with the total loan book climbing to N$128.2 billion - a monthly gain of N$1.06 billion that underscores just how deeply rising costs have reshaped borrowing behaviour across the country.

Fuel prices running roughly 30% above year-ago levels, combined with elevated stock and vehicle costs, have left firms and households with little choice but to lean on their banks.

Bank credit growth accelerated to 5.6% year-on-year in September, up from 5.4% in August, marking the fastest pace of expansion in a full year and signalling that credit demand - at least in nominal terms - is very much alive in Windhoek and beyond.

Corporates drove the bulk of the monthly increase, contributing N$656.8 million, or roughly 62% of total new flows, while household credit added N$403.5 million to bring the household book to N$73.6 billion.

That four-month streak of household flows hovering near N$400 million tells its own story - Namibian families are borrowing consistently, even as the cost of that credit quietly rises.

Mortgage lending posted its fifth consecutive monthly improvement, rising to 3.6% from 2.8% - the strongest reading of the year - with N$199.3 million added to bring the mortgage book to N$47.5 billion.

Analysts note that some buyers may have moved ahead of anticipated rate increases, though the mortgage book continues to shrink in real terms when adjusted for inflation running at 5.4%.

Vehicle finance instalment and leasing credit emerged as the standout household instrument, surging 15.6% to reach N$10.0 billion - the fastest-growing segment in this category every single month this year.

Yet not every corner of the household book is expanding at the same pace.

Other loans and advances, which include overdrafts, slowed sharply to 2.1% from 5.4%, adding only N$53.0 million as consumers appear to be rationing unsecured debt in the face of a prime rate now sitting at 10.50%.

Business credit growth told a more encouraging story, accelerating to 6.7% in September - the fastest since February - with the corporate book rising to N$54.6 billion.

Commercial mortgage lending rose N$235.8 million, lifting its growth rate to 0.8%, the strongest showing this year outside of July, hinting that at least some firms are beginning to borrow against property again.

Analysts describe the commercial mortgage move as the clearest sign yet that corporate confidence in fixed assets may be cautiously returning.

Year to date, bank credit has grown by N$5.84 billion - 39% more than the N$4.20 billion recorded over the same nine months of the prior year - a comparison that highlights the sharp momentum shift underway in Namibia's lending landscape.

The weighted average lending rate climbed 25 basis points to 9.81%, with analysts cautioning that a further rate adjustment adds additional pressure to an already stretched borrowing environment across both households and businesses in the months ahead.