Credit to private sector increases by 25 percent

The Central Bank has said that it has instituted measures to boost private sector lending. Consequently credit to the private sector has increased by 25 percent during the first quarter of 2010. Provisional statistics by the Central bank for the first quarter of 2010 indicate that lending by the licensed banks has been on the upward as compared to the same period in the fiscal year 2008/9. The Central Bank says that the new fiscal policy for the year 2010 meant to boost the economy in the wake of the spills of the global financial crisis has started showing positive results. In an exclusive interview with the Business Times since the launch of the 2010 ‘Monetary Policy and Financial Stability’ statement, Francios Kanimba said that despite the tightening of risk management lending levels to the economy has increased. ”Tightening the requirements has something to do with improvements within risk management for banks. Actually statistics that I have based on figures for first quarter 2010 compared with 2009 of the same period indicate that total volumes of new loans has improved by 25 percent,” Kanimba said. Central Bank is upbeat that liquidity is on the increase and that this trend will continue for the rest of the year. ‘What banks are doing right now which I appreciate is that they are putting more efforts on recovery of arrears especially non performing loans. While it can be said that banks are increasing their new loans it can also be said that bankers are increasing efforts to recover arrears on bad loans’, he added. Kanimba’s assessment means that a scenario is emerging whereby new forms of credit, being injected into the economy has led to an increase in the outstanding amount of credit to the private sector. “In this scenario there are those who complain that banks are tightening while others are being served with new forms of credit which has improved the position across board”, he added. Ends

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Credit to private sector increases by 25 percent