Credit extended to the private sector fell slightly by 0.6% month-on-month but grew by 8.1% year-on-year, reaching E21.5 billion in July.
The month-on-month decrease was driven by a drop in credit to households and non-profit institutions serving households (NPISH) as well as businesses, while credit to the other sector of the economy expanded, according to the Central Bank of Eswatini (CBE) Monthly Statistical Release for July/August.
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Credit to households and NPISH declined by 2% month-on-month, though it grew by 0.6% year-on-year, settling at E8.7 billion in July.
On account of loan types:
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Other personal unsecured loans decreased by 6.9% to E3.2 billion.
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Motor vehicle loans increased by 2.5% to E1.3 billion.
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Housing loans grew by 0.5% to E4.2 billion.
Credit to businesses fell by 0.6% month-on-month, but grew by 14.3% year-on-year, closing at E11.6 billion.
The monthly decline was broad-based across industries:
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Agriculture & forestry ↓13.9%
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Manufacturing ↓8.8%
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Construction ↓5.5%
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Mining & quarrying ↓4.6%
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Transport & communications ↓1.8%
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Real estate ↓0.5%
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Community, social & personal services ↓0.3%
However, the distribution and tourism sector rose sharply by 17.2%.
By business size, the decline came from large enterprises, which contracted by 1.7% to E7.9 billion (67.7% of total business credit). In contrast, credit to SMEs increased by 1.7% to E3.8 billion (32.3% of total business credit).
Credit extended to other sectors of the domestic economy rose by 13.2% month-on-month and 9.4% year-on-year, reaching E1.1 billion. This was largely driven by:
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Loans to other financial corporations ↑23.6% to E585.8 million
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Loans to parastatals ↑3.8% to E457 million
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Loans to local government ↑2.8% to E80.3 million
Meanwhile, the net government position with the banking sector improved. Net claims on government declined from E2.3 billion in June to a negative E123 million in July.
This improvement was attributed to:
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A 22.7% fall in claims against government to E6.5 billion, mainly due to repayment of the Central Bank advance.
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A 9.4% growth in government deposits to E6.6 billion, boosted by Southern African Customs Union (SACU) inflows.
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