Credit to the private sector is falling

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A report by the Ministry of Finance shows that the total value of outstanding private sector loans (PSC) declined to P21,735.9 billion in March 2024 from P21,741.9 billion in the previous month.

Report of which a copy A new vision on the Internet seen, concerns the economic results for April.

Economic experts say the PSC is a leading indicator of the financial sector’s contribution to economic activity and its decline partly reflects weakening domestic demand conditions.

The report indicated that the PSC reduction was due to a decline in foreign currency denominated loans of B66.25 from B6,603.5 in February to B6,537.3 b recorded in March 2024.

However, it said, the stock of shilling-denominated loans increased by 0.4% to PLN 15,198.6 billion from PLN 15,138.4 billion, partly due to lower lending rates and increased lending to major borrowers during the month.

The value of the loan approved for disbursement increased by 10.6% to PLN 1,096.1 billion in the same month of March from PLN 991.2 billion in the previous month.

“This was mainly attributed to increased demand for loans from mainstream borrowers who are considered less risky. Therefore, commercial banks were more willing to grant loans to these borrowers,” the report reads.

In the total amount of loans granted to the private sector in March 2024, loans to individuals and households had the largest share – 32.9%, followed by services to enterprises, communities and society (22.3%), trade (16.6% ) and agriculture (10.0%). %), among other sectors.