CREDIT EXTENDED TO PRIVATE SECTOR SLIGHTLY DROPS

MBABANE - Credit extended to the private sector closed the month under review at E18.7 billion, slightly lower by 0.02 per cent month-on-month, but grew by 7.3 per cent year-on-year.  

According to the Central Bank of Eswatini, the month-on-month decline in private sector credit was evident in credit to businesses while credit to other sectors of the domestic economy and households and non-profit institutions serving households (NPISH) increased. Credit extended to businesses contracted by 1.5 per cent month-on-month and grew by 7.1 per cent year-on-year to close at E9.2 billion at the end of February 2024. The month-on-month decline was observed in credit to the following subsectors: distribution and tourism (-10.2 per cent), mining and quarrying (-6.3 per cent), agriculture & forestry (-0.7 per cent) as well as community, social and personal services (-0.7 per cent).

Construction

On the other hand, growth was registered in the following subsectors; manufacturing (2.3 per cent), construction (1.3 per cent), transport and communication (1.2 per cent) as well as real estate (1.2 per cent). Further analysis of credit to businesses revealed that credit to large enterprises decelerated by 2.8 per cent month-on-month and grew by 1.2 per cent year-on-year to stand at E6.2 billion. Credit to small and medium enterprises (SMEs), on the contrary, increased by 1.4 per cent month-on-month and 21.2 per cent year-on-year to close the review month at E3 billion. Credit extended to other sectors of the economy grew by 8.3 per cent month-on-month and 29.5 per cent year-on-year to stand at E970.9 million at the end of February 2024.
Responsible for the increase were credit to other financial corporations and parastatals, which improved by 12.4 per cent to E571.1 million and 4.1 per cent to E320.5 million, respectively.
Credit to local government, on the other hand, fell by 1.4 per cent to stand at E79.3 million.

Claims

Credit extended to households and NPISH closed the month under review at E8.5 billion, reflecting an increase of 0.7 per cent month-on-month and 5.5 per cent year-on-year. Growth was registered in housing and other personal (unsecured) loans while motor vehicle loans decelerated. Consequently, housing and other personal (unsecured) loans rose by 0.9 per cent to E4.3 billion and 0.7 per cent to E3.2 billion, respectively. On the other hand, motor vehicle loans fell by 0.03 per cent to E1.1 billion at the end of February 2024. Furthermore, net claims on government held by the banking sector reached E2.1 billion at the end of February 2024, higher by 25.7 per cent month-on-month but lower by 28.2 per cent year-on-year. The month-on-month, increase was on account of government claims, which grew by 11.5 per cent to E7.2 billion, due to an advance from the central bank over the month under review. Government deposits also grew by 6.7 per cent to E5.1 billion over the review month.

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