Friday, August 19, 2022
  • About Us
  • ImagiNATION
  • Rate Card
  • Contact Us
The Nation Online
Advertisement
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Columns
  • Sports
  • Chichewa
  • Enation
No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Columns
  • Sports
  • Chichewa
  • Enation
No Result
View All Result
No Result
View All Result
Home Business Business News

Banks see credit Demand rising

by Grace Phiri
06/09/2021
in Business News, Front Page
3 min read
0
Share on FacebookShare on TwitterShare on WhatsAppShare on LinkedinLinkedinShare via Email

Bankers Association of Malawi (BAM), a grouping of  eight commercial banks, says it expects credit demand to rise in the second half of this year as economic activity picks up.

BAM’s projection comes against the backdrop of a slight rise in credit losses in 2020 owing to the Covid-19 pandemic, which disrupted economic activity and increased credit risk.

In a written response on Friday, BAM chief executive officer Lyness Nkungula said domestic and global economic agents are now adapting to new ways of doing business to boost economic activity amid the pandemic.

She said: “We have, thus, seen not only a decline in credit default rates, but also an increase in credit demand in recent months.

“We expect the trend to continue in the second half of the year.”

Published Reserve Bank of Malawi (RBM) figures show that the banking systems’ claims on the domestic economy grew by K27.8 billion to K2.1 trillion at the end of the second quarter (April to June) of 2021.

This compares to an increase of K260 billion recorded in the preceding quarter and K232.6 billion registered in a similar quarter the previous year.

The central bank  figures show that the growth in net domestic credit was largely driven by private sector credit, which registered an annual growth rate of 27 percent from 18.9 percent.

On a quarter-on-quarter basis, private sector credit rose by K79.8 billion to K776.2 billion during the second quarter of 2021. This compares with quarterly increases of K4 billion recorded in the preceding quarter and K25.2 billion reported during the second quarter of 2020.

On the other hand, loan loss provision— an income set aside for potential loan defaults and expenses to ensure banks are presenting an accurate assessment of their overall financial health—declined by a meager 0.1 percentage points to negative 4.1 percent during the quarter under review, from negative 4.2 percent the previous quarter.

“The strong growth in private sector credit reflected the high agro-driven economic activity, as agricultural marketing season progressed during the review period and the business community adapted to new ways of doing business amid Covid-19 pandemic,” reads the RBM Second Quarter Financial and Economic Review published last Wednesday.

Of the increase in the stock of total private sector credit during the period under review, commercial and industrial loans accounted for K70.5 billion while loans to individuals and households contributed K17 billion.

Meanwhile, repayments amounting to K5.1 billion of outstanding foreign currency loans and K4.3 billion of mortgage loan stock eased the expansionary pressures on private sector credit.

Previous Post

Ultra-poor households get K1 billion boost

Next Post

Advocate for universal health coverage, Balaka CSOs told

Related Posts

Front Page

Bullets ready for big stage

August 19, 2022
Business News

Slow pace of development worries Planning Commission

August 19, 2022
Business News

Firms decry proposed electricity tariff hike 

August 19, 2022
Next Post

Advocate for universal health coverage, Balaka CSOs told

Opinions and Columns

My Turn

Diagnostic tech cost on patients

August 19, 2022
Business Unpacked

Why public debt should worry every patriotic Malawian

August 18, 2022
Rise and Shine

How to triumph in interviews

August 18, 2022
My Turn

Making briquettes at Malasha

August 15, 2022

Malawi-Music.com Top10

Trending Stories

  • Court snubs tenants on govt houses

    0 shares
    Share 0 Tweet 0
  • ‘Blantyre derby could have fetched more’

    0 shares
    Share 0 Tweet 0
  • Why graft cases stall

    0 shares
    Share 0 Tweet 0
  • World Bank protests K14bn ICT contract

    0 shares
    Share 0 Tweet 0
  • Govt appoints university working committee

    0 shares
    Share 0 Tweet 0

  • Values
  • Our Philosophy
  • Editorial policy
  • Advertising Policy
  • Code of Conduct
  • Plagiarism disclaimer
  • Disclaimer
  • Privacy Policy
  • Terms of use

© 2022 Nation Publications Limited. All Rights Reserved.

No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Entertainment
  • Life & Style
    • Every Woman
      • Soul
      • Family
    • Religion
    • Feature
  • Society
  • Columns
  • Sports
  • Chichewa
  • Enation

© 2020 Nation Publications Limited. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.