Household credit growth decelerates

According to a financial statistics report released by the Bank of Botswana (BoB) this week, credit growth by households has eased from as high as 24 percent at the end of 2013 to under 16 percent in May this year.

The development is a reversal of trends in the banking sector where households have been borrowing at an alarming, hasty rate leading to analysts’ call for a policy intervention to monitor the trend. Such a development, say analysts, had the potential to destabilise the financial sector.  June Financial statistics figures from the central bank show that year on year, credit growth declined from 15 percent to 13.3 percent, falling 18.4 percent to 15.9 percent for households and from 10.8 percent to 10.2 percent for businesses. “The share of credit to the household sector in total credit fell from 56.8 percent in April to 56.3 percent in May while the amount of credit fell by P142 million in the month,” said the BoB.