Consumers show more awareness of financial preparedness
TransUnion’s latest Consumer Pulse Study reveals that Namibian consumers continue to face financial difficulties due to job losses, salary cuts and high inflation.In Q2 2024, 38% of consumers reported stagnant incomes, and 34% saw decreased incomes, both slight improvements from Q3 2023. Conversely, 28% of households experienced income growth, up from 20%.
CEO Lara Enslin highlighted Namibian consumers' resilience, noting their proactive financial management despite financial strain. Inflation, averaging 5.9% in 2023 and primarily driven by rising food prices, decreased to 4.9% in early 2024 but remained a concern due to high transport costs from rising fuel prices.
To manage, 52% of households cut discretionary spending in the past three months, with Millennials and Gen X leading these adjustments. Additionally, 27% reduced or cancelled digital services and subscriptions.
Optimistic
Despite economic challenges, 81% of Namibians are optimistic about future income prospects, especially Gen Z (85%) and Millennials (82%). However, 49% still foresee difficulties in meeting bills and loans, up from 45%. To cope, 36% plan partial payments, 35% seek temporary work, and 25% intend to borrow from family or friends. Encouragingly, 44% plan to increase retirement investments next quarter, 39% on medical services, and 36% on digital services, with 46% expecting to allocate more towards bills and loans.
Access to credit remains crucial, with 94% of respondents viewing it as essential, although only 32% feel they have adequate access, down from 34%. Credit demand rose, with 41% planning to seek new credit within a year, particularly Millennials (42%) and Gen X (43%). Despite a high bank lending rate of 11.5%, many still pursued credit, though fears of rejection (34%) and high costs (28%) led some to abandon applications.
Concern
Digital fraud remains a concern, as Namibia's low internet penetration means 75% of consumers conduct less than half their transactions online. Although fraud attempts decreased from 59% to 52%, 11% of respondents fell victim to scams, including money and gift card fraud (37%), vishing (31%), and phishing (29%). Concern over personal information sharing is high, with identity theft (76%) and invasion of privacy (75%) being top worries. Strengthening cybersecurity and digital literacy is essential to mitigate these risks, Enslin emphasised.