Bank credit to Mauritius private sector down by Rs 22 billion at Feb-end
The construction sector continued to be one of the biggest debtors to the banking sector, with loans to the sector amounting to Rs 75.43 billion at the end of February 2014, or 24.8% of all banking credit. (Image: Proudly African)
Bank credit granted to the private sector decreased by Rs 21.93 billion to Rs 303.89 billion in February 2014, compared to Rs 281.96 billion in the year-ago period.
It may be noted that bank credit availed by the private sector in January 2014 stood at Rs 304.13 billion.
Also, according to the Consolidated Statement of Sector-Wise Distribution of Credit to the Private Sector released by the Bank of Mauritius, the construction sector availed maximum credit from banks.
Credit to the construction sector amounted to Rs 75.43 billion at the end of February 2014, or 24.8% of all banking credit, compared to Rs 74.83 billion at the end of January 2014.
Under the construction sector, the highest debt availed was by housing development at Rs 42.15 billion while the commercial property development segment tailed at Rs 14.28 billion.
Tourism, which came a distant second, availed Rs 48.26 billion worth of credit in February 2014 or 15% of credit availed across all sectors; however, a decrease was noted compared to January 2014 when it amounted to Rs 48.37 billion.
Also, under the tourism sector, the highest amount of debt availed was by hotels at Rs 28.59 billion, while Hotel Management Service Certificate Holders tailed at Rs 15.01 billion.
The traders sector rounded up the top three debtors to the banking system. However, credit to the sector witnessed a decline to Rs 28.84 billion at the end of February 2014 compared to Rs 29.84 billion at end January.
Wholesalers was the segment which availed highest debt under the category of traders, at Rs 8.58 billion. Retailers – other than hypermarkets, supermarkets, snacks & shops and pharmaceuticals & chemists – followed at Rs 4.15 billion.
Earlier this month, the Bank of Mauritius, in the latest edition of its Financial Stability Report, stated that the credit portfolio of banks in Mauritius is ‘rather concentrated’, with 45% of banks’ private sector credit channeled to construction and tourism.
Hence, in October, 2013, due to the increasing levels of non-performing loans, the Bank of Mauritius introduced new guidelines on sectoral credit concentration on asset growth vis-à-vis real GDP growth.
Accordingly, the tourism sector is expected to adhere to a credit cap of 25% from July 1, 2014, 24% as from July 1, 2015 and to 22.5% as from July 1, 2016; the personal sector, to 15.0% from July 1, 2014 and to 12.5% as from July 1, 2015; and finally the commercial, residential and land parcelling sector is expected to reduce from 15% as from July 1, 2014 and to 12.5% as from July 1, 2015.