CBE’S CREDIT TO PRIVATE SECTOR UP TO E17.7 BN

MBABANE - Central Bank of Eswatini (CBE)’s credit extended to the private sector rose by 1.1 per cent month-on-month and 10.3 per cent year-on-year to reach E17.7 billion in April 2023.

This is according to the latest CBE’s monthly statistical statement.  It was reported that the rise in the credit extended to the private sector was reflecting an improvement of 1.1 per cent month-on-month and 10.3 per cent year-on year.

It was stated that the expansion was driven by all credit categories, namely; credit to other sectors of the domestic economy, businesses and households and non-profit institutions serving households (NPISH).  

Credit extended to other sectors increased by 5.5 per cent month-on-month and 14.9 per cent year-on-year to close the review month at E972.1 million. Growth was driven by all sub-sectors which, are credit to other financial corporations, public nonfinancial corporations and local government.

As a result, credit to other financial corporations, public nonfinancial corporations, and local government rose by 5.80 per cent to E597.1 million, 5.78 per cent to E307.1 million and 1.5 per cent to E67.9 million, respectively. 

Credit extended to businesses grew by 1.0 per cent month-on-month and 15.8 per cent year-on-year to reach E8.6 billion at the end of April 2023.

The growth was driven by all subsectors with the exception of credit to distribution and tourism sector.  As a result, credit to the following subsectors increased compared to March 2023; mining and quarrying (10.5 per cent), manufacturing (5.7 per cent), construction (5.3 per cent), agriculture and forestry (4.6 per cent), real estate (3.2 per cent), community, social and personal services (3.0 per cent) and transport and communication (2.3 per cent). Partly dampening the increase was a decline of 12.5 per cent in credit to the distribution and tourism subsector.

Within the business sector, credit extended to large enterprises amounted to E6.0 billion at the end of April 2023, reflecting a month-on-month and year-on-year growth of 0.1 per cent and 14.4 per cent, respectively.

The major sectors that contributed to the growth were mining and quarrying, construction, agriculture and forestry, real estate, manufacturing as well as community, social and personal services. Credit extended to small and medium enterprises (SMEs) likewise, improved by 3.1 per cent month-on month and 19.1 per cent year-on-year to close the month under review at E2.6 billion. The main sectors responsible for the increase in credit to SMEs were manufacturing and transport and communication.

Credit extended to households and NPISH amounted to E8.1 billion at the end of April 2023, higher by 0.8 per cent relative to the previous month and 4.6 per cent compared to April 2022.

Growth was on account of other personal (unsecured) and mortgage loans, which grew by 1.4 per cent to E3.1 billion and 0.8 per cent to E4.1 billion, respectively. Motor vehicle loans, on the other hand, fell by 1.3 per cent month-on-month to E977.1 million.

Meanwhile, net claims on government with the banking sector closed the month under review at E2.2 billion, reflecting a decline of 38.7 per cent month-on-month and growth of 13.2 per cent yearon-year. The month-on-month reduction was due to government partly repaying the advance from the Central Bank after receipt of SACU revenue in the first week of April 2023. Notably, claims on government receded by 13.4 per cent month-on-month to E6.7 billion whereas government deposits, grew by 8.1 per cent to E4.5 billion at the end of April 2023. 

The CBE further reported that overall liquidity position of banks’ assets edged up by 10.4 per cent from March 2023, however, year-on-year fell by 0.8 per cent to close at E7.6 billion at the end of April 2023.

The month-on month improvement emanated from an expansion in the banks’ balances with the Central Bank and investment in government securities. The banks’ liquidity ratio, rose by 1.5 percentage points from 36.0 per cent recorded in March 2023 to 37.5 per cent at the end of April 2023.

It is also worth noting that the the prime lending rate was also raised by 50 basis points to 11.25 per cent in May 2023.

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