Credit appetite holds strong with active cards rising in April

• New issuance slows as borrowing costs climb

• Number of active credit cards rose to 159,791 in April, from 154,693 in March, an increase of 5,098 cards
• Outstanding credit card receivables increased to Rs.2.22tn in April, from Rs.2.21tn in March, while total outstanding balances rose to Rs.2.23tn, from Rs.2.22tn

The consumers continued to tap credit despite the higher borrowing costs and mounting pressure on household finances, leading Sri Lanka’s active credit card base to expand in April. 

However, the pace of new card issuance eased from the previous month.

The Central Bank data showed the number of active credit cards rose to 159,791 in April, from 154,693 in March, an increase of 5,098 cards. 

Total credit cards in circulation, including inactive cards, increased to 200,019, from 194,105 a month earlier.

The higher number of active cards was accompanied by continued strength in private sector credit, which rose by Rs.100.5 billion in April and recorded a year-on-year growth of 27 percent, according to the Central Bank.

Outstanding credit card receivables increased to Rs.2.22 trillion in April, from Rs.2.21 trillion in March, while the total outstanding balances rose to Rs.2.23 trillion, from Rs.2.22 trillion.

Accordingly, consumer demand remains resilient despite a gradual increase in market interest rates and signs that the monetary conditions are tightening.

The increase in active credit cards mirrored a broader credit expansion in the economy, with private sector credit rising by Rs.100.5 billion in April and recording a year-on-year growth of 27 percent.

The growth in active cards, however, was slower than the increase recorded in March, indicating that while the consumers continue to rely on card-based financing, the rapid expansion seen following the economic recovery may be moderating.