Bank of Botswana (BoB) figures provided last Friday indicate that defaults among individuals made their closest approach to P1 billion, driven by the growth of fresh arrears as well as the graduation of existing arrears to more severe categories.By March 31, 2013, P294 million in household loans were overdue by between 31 - 90 days, with P530.8 million in the 91 - 180 day category and P156 million categorised as beyond 180 days.This is compared to P198.7 million, P613.3 million and P81 million for the three arrears' categories respectively in the fourth quarter of 2012. At that point, household arrears were equal to 4.55 percent of the total loans owed by households to commercial banks.
For the first quarter of the year, household arrears made up 62 percent of total commercial bank arrears, compared to 80 percent in the fourth quarter of last year.The latest arrears figures come as other data confirms an increase in credit appetite among individuals contrasting with a slowdown among businesses.
BoB figures indicate that between January and April, outstanding commercial bank loans attributable to households rose from P20 billion to 21.2 billion, while that attributable to businesses rose from P14.8 billion to P15 billion.Businesses that participated in the BoB's recent Business Expectations Survey cited cost of finance as one of the challenges of the current economic climate.
