NASSAU, BAHAMAS — A Central Bank survey of bank lending conditions has revealed that demand for credit declined sharply across all markets during the first half of 2020, as application volumes fell to “historically low levels”.
The regulator noted that during the first half of 2020, demand for credit was largely impacted by the COVID-19 pandemic.
“During the review period, the number of consumer loans applications processed declined by 46.6 percent to 9,553, relative to the same period last year,” the regulator stated.
“Reductions were noted in all consumer credit categories, most notably for purposes related to education (71.1 percent) and credit cards (68.5 percent). In contrast, loan requests for commercial vehicle purchases expanded by 33.3 percent.
It continued: “Despite fewer applications, the average approval rates firmed by 4.7 percentage points to 87.2 percent in the second half of 2020, the highest since the second half of 2016. As to declined applications, the most common reasons cited by banks were high debt service ratios (38.2 percent), underemployment (34.1 percent) and other “miscellaneous” factors (9.9 percent).”