Banks caught in liquidity, weak economy spiral

Linah Mohohlo
Linah Mohohlo

The halving of credit growth figures in the first six months of the year, despite the central bank’s interventions to ease lending, reflects a situation where a flagging economic environment is aggravating commercial banks’ quandary with tight liquidity, observes Staff Writer BRIAN BENZA

According to Bank of Botswana (BoB) figures released this week, the rate of loans uptake by both business and households dropped 45 percent in the first half of the year, from 13.5 percent in December 2014 to 7.4 percent in June 2015. The slower credit growth comes on the backdrop of a two pronged intervention by the BoB in the period, raising suggestions that the simple matrix of supply and demand of credit in the banking system has been caught up in other industry-bred complexities. 

In a bid to bolster economic growth through reduced cost of lending by commercial banks, the central bank cut the benchmark rate by a percentage point in the first half of the year.

Editor's Comment
Our queen: Bring home the crown

Well-wishers gathered at the Sir Seretse Khama International Airport to bid our queen farewell and wish her success as she joins other beauties from around the globe for the coveted crown. Competing in such events is nerve-wracking, and one needs to be fully prepared to stand a chance of making it as a finalist.It is not just about physical fitness; mental state matters too. Unfortunately, sometimes our queens end up facing such fierce...

Have a Story? Send Us a tip
arrow up