Review: Credit growth at a slower pace in February
2 April, 2018, 12:00 am
THE central bank says while credit growth expanded in February, it was somewhat grew at a slower pace over the review period.
According to the Reserve Bank of Fiji (RBF) Economic Review for March released last week, private sector credit grew by 8.1 per cent to $7,432.2 million compared with 13.5 percent in February last year.
It also noted that conditions in the financial sector remained conducive to investment and growth.
The central bank noted that new commercial bank credit remained upbeat as it expanded by 16.0 per cent to $438.0 million in the year to February compared with 11.7 per cent in the same period last year.
Interest rates movements were mixed as the weighted new lending rate for commercial banks rose to 5.78 per cent from 5.68 percent in January while the weighted outstanding rate remained unchanged at 5.64 percent.
In the RBF’s Economic Review released in February, it noted that the commercial banks’ weighted average lending rate in January of this year declined to 5.64 per cent from 5.83 per cent a year ago.
In the first six months of last year, bank lending to Fiji’s business and household sectors somewhat slowed attributed to the tightening of credit standards as applied to the approval of loans.
Bank lending in Fiji has been largely concentrated in the business sector followed by the household sector.
As of June last year, total borrowing by private business entities stood at $4.2 billion which were mainly for the wholesale, retail, hotels and restaurants (30.2 per cent), real estate (19.1 per cent), building and construction (15.3 per cent) and manufacturing (11.6 per cent) sectors.
Private individual loans of $1.8b as at June 30, 2017 were mainly for housing (72.0 per cent) and transportation (7.4 per cent) purposes.
Meanwhile, the central bank stated that funding cost for the banks rose in February of this year as increases were noted in the weighted outstanding time deposit (3.21 per cent) and new time deposit (2.84 per cent) rate.