Mozambican banks reduce lending to the economy in 2014

6 November 2014

Commercial banks operating in the Mozambican market granted credit amounting to US$968.8 million in the first nine months of the year, against US$1.217 billion in the same period of 2013, the Bank of Mozambique said Wednesday in Maputo.

The drop led to “more moderate expansion of credit to the economy,” which went from 28 percent to 21 percent, according to the director of the Bank of Mozambique, Waldemar de Sousa, during the presentation of the bank’s 11th report on “Economic Climate and Inflation Outlook.”

“Most of the credit has been made available to private companies, about 63 percent of the total value, 27 percent to individuals and less than 10 percent to public companies,” said Waldemar de Sousa.

Mozambique’s central bank signalled a gradual decline in the percentage of loans granted by banks with interest rates of over 22.5 percent, which increased from 29.2 percent of total loans in December 2011 to 8.5 percent in September this year.

At the same time loans with interest rates below 15 percent, the so-called “prime rate” increased from 14.8 percent in 2011 to 43.2 percent in the third quarter of this year.

In the range of interest rates below 15 percent and above 22.5 percent, the changes were less significant, and there was a 56 percent drop in total loans to 48.3 percent, according to figures from the bank.

A recent study issued by the Mozambican Bank Association said Mozambique’s 18 commercial banks made profits of about US$168 million 2013, a year on year increase of about 32 percent.

According to the Bank of Mozambique, this year 21 new banking branches were opened, bringing the total to 541 in the country’s 150 districts, where 272 microcredit institutions also operate, compared to 233 in 2013. (macauhub/MZ)