Credit to private sector moderates in May but spike in SoE debt seen

5 July 2018 12:00 am - 0     - {{hitsCtrl.values.hits}}

A A A

Private borrowings have shown some respite in recent months as such borrowings from the banking sector have moderated substantially during April and May, after the spike seen in the month before.

 
However, the credit to the public corporations have continued to cause persistent headaches to policymakers as such credit has substantially grown, indicating urgent need for reform in this space. 
According to the latest data seen by Mirror Business for the month of May, Sri Lanka’s banks have granted loans to private individuals and corporates valued Rs.29 billion, in comparison to Rs.22 billion granted in April. On a year-on-year basis, private sector credit has grown by a little over 15 percent in May, slightly below 15.3 percent growth seen in April. 


While there is a slight upward movement in credit to the private sector in absolute terms between the two months, the figures show a steeper slowdown from the Rs.122 billion such borrowings hit in March. The Central Bank expects to end the year with no more than Rs.650 billion in new private sector loans with year-on-year growth of between 13 and 14 percent. 


During the first five months, the banks have in total granted private sector loans valued Rs.274 billion. 
It was only recently Mirror Business showed that a bulk of the loans or at least one-fifth of the new loans goes to consumption and only a fraction is channelled to the agriculture and manufacturing sectors of the economy. 


Consumer loans are granted in the form of personal loans, housing loans, credit cards, pawning, leasing and auto loans and sometimes even as micro loans.  Last week, the import and export data released by the Central Bank showed that the country’s vehicle import bill had more than doubled to US $ 517 million during the first four months from US $ 248 million spent to import cars during the same period in 2017.  


Meanwhile, credit to the public corporations in May was recorded at Rs.27 billion, up from Rs.24 billion in April. 

However, the first five months’ public corporation credit swelled to Rs.71 billion from Rs.23 billion in the same period in 2017. 


Sri Lanka’s loss-making public enterprises have been a major cause for fiscal instability for years as they require a substantial amount of taxpayers’ money to remain afloat. 


Meanwhile, net credit to the government has grown by Rs.1.7 billion in May in comparison to Rs.44 billion in April, while for the first five months the figure stood at Rs.156 billion, down from Rs.196 billion recorded for the same period, last year.


As a result of these developments in the monetary sector, the overall money supply measured through broad money or M2b has slightly moderated to 15 percent in May from 16.8 percent in April. 

 

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Employees’ health and safety our top-most priority - Brandix

When inquired, Brandix Apparel Limited said that health and safety of employe

“Workers who fainted had water sprinkled on their faces and had to work again”

Health authorities believe the first reported Covid-19 infected worker from t

“Social media ruined us” - husband of Minuwangoda Brandix factory worker

The Minuwangoda Brandix factory worker who first tested positive for Covid-19

Last rites far from home

The body of the Sri Lankan migrant worker Bandu who died of coronavirus in Du

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.