Bank credit growth in Botswana has slowed down amid the pandemic, dropping from 10.7 percent to 6.4 percent during the first lockdown imposed from the end of March to July, a local economic analyst firm said Tuesday.
The decrease was driven by a sharp contraction in credit extended to private business during this period, researchers Sethunya Sejoe and Kitso Mokhurutshe at Econsult said.
Meanwhile, “although bank credit to households continued to grow during this period, it did so at a much slower pace, with the growth rate of credit taken up by households falling from 15.1 percent, pre-COVID-19, to 9.8 percent by the end of June,” the researchers said.
In addition, Econsult highlighted that the total arrears on bank lending as a proportion of total bank assets declined during the second quarter, driven by a fall in business arrears.
However, despite the economic downturn, businesses have not begun defaulting on their loan repayments at an increased rate, the firm noted.
Meanwhile, commercial banks have sharply increased their provisions for bad and doubtful debts in the second quarter in the face of uncertainties.
The government also extended a 1 billion pula (approximately 8.9 million U.S. dollars) loan guarantee scheme in September to help maintain credit extension and reduce banks’ exposure to non-performing loan risk going forward, as more businesses challenges unravel due to COVID-19
Follow our socials Whatsapp, Facebook, Instagram, Twitter, and Google News.
![{FILES] Super Eagles players during training before their international friendly matches against Algeria and Tunisia, last week](https://www.afriupdate.com/wp-content/uploads/2020/11/Eagles-3-1062x598-1.jpg "NFF ‘combs Abuja’ for money ahead of Super Eagles, Leone Stars’ clash 7")
