Mmegi

Stiff economy turns households off debt

Everyday people: Banks are increasingly channelling new loans towards company-backed schemes and government employees, as a way of hedging their risks PIC: MORERI SEJAKGOMO
Everyday people: Banks are increasingly channelling new loans towards company-backed schemes and government employees, as a way of hedging their risks PIC: MORERI SEJAKGOMO

The smiting heat of Botswana’s economy has dampened the credit appetite of households, as the uptake of loans grows at a stale pace compared to other regional economies. For households, the continuing effects of inflation and Covid-related economic pressures still linger on the horizon, Mmegi Staff Writer, TIMOTHY LEWANIKA reports

A recent Bank of Botswana (BoB) survey on household indebtedness found that by December 2023, lending to households had experienced mild growth despite the central bank’s efforts to spur borrowing by maintaining interest rates throughout most of 2023.Credit, a major driver of economic activity and growth, was mildly taken up by households as the pains of a subdued economic environment weighed in on their confidence to leverage on debt.

“The results of the survey show that 80% of banks and 50% of the surveyed microlenders found credit demand to be moderate in 2023, while 70% of banks and 60% of microlenders expect credit demand to be high in 2024,” the BoB found.

Editor's Comment
Tana project a welcome development

Whilst the project received mixed reactions from members of the public, the project is indeed a welcome development, which needs to be implemented as soon as possible. Many shared their opinion, with those against the project decrying that if implemented, it will kill the already struggling public transport industry.Many countries around the world have state-run public transport, and those who have travelled to such countries will give testimony...

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