This is according to recently released central bank data.

The period of being in arrears ranges from one month to over a year, with many not being serviced for more than a year.

This balance stood at N$4,9 billion at the end of October last year, and is set to increase this year.

When loans become unserviced for more than three months, they are classified as non-performing.

At the end of the quarter, non-performing loans reached an all-time high of N$7,2 billion – a whopping 6,8% of the total loan book, which stood at N$105 billion at the end of the quarter.

Non-performing loans are also dominated by property loans, standing at N$4,4 billion.

Although considered high and cracking the 6% ceiling the Bank of Namibia (BoN) has set, the bank says there is no major concern about financial stability yet.

The BoN, however, has ruled that once a loan becomes non-performing, the collateral value of that loan should be reduced by 30%.

According to the central bank when it introduced this rule last year, this rule is mainly for the banks to ensure that they become prudent and not provide sufficiently for bad loans because there is collateral for the loans.

In December the macroprudential oversight committee (MOC) of the bank, however, expressed concern over increasing non-performing loans in the commercial banking space, but said banks were still well capitalised to deal with possible losses.

Because non-performing loans negatively impact banks' liquidity and profitability, the central bank said the assessment showed the banking sector will remain solvent throughout 2022.

“Of concern is the continued increase in the non-performing loan ratio during the period under review, though marginally. However, the bank is monitoring these developments closely,” read the MOC's statement in December.

Data at the end of the third quarter shows that at least N$53 million worth of loans were written off completely, and N$707 million worth of interest was suspended.

Banks still have N$3,5 billion set aside to provide for further losses.

The Khomas region still has the lion's share of loans at N$77,5 billion, and is feeling the pinch of defaulters at N$5,6 billion.

Over 590 000 individuals and institutions in Namibia last year had active loans of some sort from commercial banks.

At least 5 700 houses were bought in the third quarter over a balance movement of N$402 million.

Commercial banks at the end of Oct­ober repossessed assets worth N$167 million, and income from fees continues to soar – also reaching an all-time high of N$312 million, which is the highest ever for the year.

According to the BoN's data, the banks are still well capitalised, and return on assets stood at 13,6% at the end of the quarter.