Bank arrears improve

Bank of Botswana figures released recently indicate that from the record high in January, the arrears owed to commercial banks slowly declined, helped in part by lower credit output by the banks.

Outstanding loans by commercial banks were measured at P89.4 billion in January, peaking at P90.4 billion in May, before declining to P89.2 billion in June. The arrears position peaked in January before declining to a low for the six-month period of P6.57 billion in March, then climbing to P6.89 billion in June. Central bank numbers indicate that the majority of arrears in June were classified as 'specific provisions', meaning those loans that are more than 180 days old and are potentially more difficult to recover. As at June, specific provision arrears amounted to P1.83 billion or 27% of the total P6.89 billion position.