Economists have long recognised that several factors are usually at work, when it comes to the determinants of
bank credits in modern economies. Indeed, this subject has recently been reawakened by various scholars in the
context of both the developing and developed countries, and Namibia is not an exception to this discussion. This
study aims at addressing two key questions. Firstly, the driving factors that push the business sector in Namibia
to demand for credit facilities are identified and analysed. Secondly, the neoclassical theory that postulates that
there is an inverse and significant relationship between the real interest rate and investment growth is tested for
Namibia. The study relied upon co-integration and error correction procedures in carrying out the investigation.
Additionally, annual time series data for the period running from 1993 to 2010 was used in the study. The key
findings arising from this study are the following. Firstly, the demand for bank credit in Namibia responds more
to factors other than real interest rate. Secondly, the neoclassical theory, which postulates that real interest rates
have significant dampening impact on credit decisions, does not hold water in the case of Namibia. In light of
these findings, specific recommendations are put forward. Finally, future direction regarding further research
concerning the issue under investigation is highlighted.