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Commercial banks lending to productive sector: evidence from Namibia

Commercial banks lending to productive sector: evidence from Namibia

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Namibia has a dual economy characterised by a highly developed modern market economy and the typical traditional rural economy. The productive sector in Namibian economy is the major source of national income and employment. The formal sector produces most of the country''s wealth. This sector controls about 44 percent of total production and is owned by about 4000 people while more than two third of the Namibian population depend on subsistence agriculture in rural areas. A large number of the Namibian population is engaged in subsistence agriculture and livestock production. The people involved in subsistence agriculture produce for their own consumption. However, recent developments in Namibia indicate that a growing number of rural farmers produce not only for their own consumption but also for commercial purposes. The role of adequate credit to this up and coming sector of the economy cannot be overemphasized (BoN 2005).
An analysis on the commercial banks lending to productive sector: evidence from Namibia