NASSAU, BAHAMAS — Private sector appetite for credit was “sharply scaled back” over the second half of 2020, with loan requests dropping by nearly 60 percent due to the economic downturn as a result of the COVID-19 pandemic, according to the Central Bank.
Central Bank Governor John Rolle, while commenting on the regulator’s Monthly Economic and Financial Developments report for March, noted that based on a bank lending conditions survey for the period July to December 2020, there were 11,398 loan applications processed.
This, he noted, represented a 58.3 percent decline over the second half of 2019. Most loan denials were due to high debt service ratios, lack of collateral and underemployment.
Consumer loan applications continued to dominate, representing 89.3 percent of total loans, 67 percent of which were approved.
With regards to the mortgage market, applications received were lower by 19.6 percent when compared with the second half of 2019.
Commenting on the banking sector, Rolle said: “Additional credit losses continue to be expected over the course [of] the recovery from the pandemic, although the system is not forecasted to experience the magnitude of write-offs that occurred after the 2008 recession.