{"id":24352,"date":"2020-05-08T08:20:35","date_gmt":"2020-05-08T06:20:35","guid":{"rendered":"https:\/\/ijg.net\/research\/?p=24352"},"modified":"2020-05-08T08:20:38","modified_gmt":"2020-05-08T06:20:38","slug":"psce-march-2020","status":"publish","type":"post","link":"https:\/\/ijg.net\/research\/psce-march-2020\/","title":{"rendered":"PSCE \u2013 March 2020"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Overall<\/strong><\/p>\n\n\n\n

Total credit extended to the private sector (PSCE) decreased by N$130.5 million or 0.13% m\/m in March, bringing the cumulative credit outstanding to N$103.6 billion. This is the second consecutive month that we have seen a month-on-month contraction in credit extension. On a year-on-year basis, private sector credit extension grew by 5.79% in March, compared to 5.87% in February. N$2.23 billion worth of credit has been extended to corporates and N$3.73 billion to individuals on a 12-month cumulative basis, while the non-resident private sector has decreased their borrowings by N$204.0 million.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Individuals<\/strong><\/p>\n\n\n\n

Credit\nextended to individuals increased by 0.4% m\/m and 7.2% y\/y in March, versus 0.5%\nm\/m and 6.7% y\/y in December. Installment credit remained depressed,\ncontracting by 0.4% m\/m and 4.8% y\/y. Individuals repaid their overdrafts\nduring the month, resulting in a decline of 1.0% m\/m, but an increase of 14.4%\ny\/y. The value of mortgage loans extended to individuals grew by 0.6% m\/m and\n5.9% y\/y. Other loans and advances (or OLA, which is made up of credit card\ndebt, personal and term loans) grew by 0.5% m\/m and 27.2% y\/y in March. We\nexpected the OLA category to be higher considering that a large number of\nconsumers were \u2018panic buying\u2019 staple products (such toilet paper) ahead of the\nlockdown.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Credit Extension to Corporates<\/strong><\/p>\n\n\n\n

Credit\nextended to corporates contracted by 0.7% m\/m in March after contracting by\n1.2% m\/m in February. On an annual basis credit extension to corporates\nincreased by 4.6% y\/y in March. The month-on-month contraction is mostly caused\nby businesses paying back overdrafts. Overdraft facilities extended to corporates\ndecreased by 3.9% m\/m and 1.1% y\/y. Mortgage loans to corporates increased by a\nmoderate 0.2% m\/m and 0.3% y\/y. Installment credit extended to corporates,\nwhich has been contracting since February 2017 on an annual basis, remained\ndepressed, contracting by 0.8% m\/m and 7.5% y\/y in March.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Banking Sector Liquidity <\/strong><\/p>\n\n\n\n

The overall\nliquidity position of commercial banks decreased by N$71.3 million to reach an\naverage of N$254.5 million. Commercial banks continued to utilise the BoN\u2019s\nrepo facility, as the overall liquidity position remained low. The balance of\nrepo\u2019s outstanding increased from N$1.01 billion at the start of March to\nN$1.61 billion at the end of the month. The BoN ascribes the low liquidity\nposition to the commercial banks buying liquid assets such as treasury bills,\nas opposed to keeping cash in the current weak domestic economic environment.\nIt is worth noting that the liquidity position improved substantially in April.\n<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Reserves\nand Money Supply<\/strong><\/p>\n\n\n\n

Broad money supply rose by N$9.23 billion or 5.9% y\/y in\nMarch, as per the BoN\u2019s latest monetary statistics release. Foreign reserve\nbalances rose by 2.5% m\/m to N$32.97 billion in March. According to the BoN,\nthe increase was supported by a favourable exchange rate during the period.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Outlook<\/strong><\/p>\n\n\n\n

Private sector credit extension remained depressed at the end of March, increasing by only 5.8% y\/y, with annualised growth slowing for a second consecutive month. From a rolling 12-month perspective, credit issuance is up 5.9% from the N$5.36 billion issuance observed at the end of March 2019, with individuals taking up most (70.3%) of the credit extended over the past 12 months.<\/p>\n\n\n\n

While this hasn\u2019t been the case in March, when the\nlockdown started, we expect both consumers and businesses to have increased\ntheir uptake of short-term debt in April to cover costs while economic activity,\nand subsequently some individual\u2019s incomes and company revenues, ground to a\nhalt. The second surprise 100 basis point repo rate cut in April should provide\nthese financially stressed businesses and consumers with some relief, but we\ndon\u2019t expect it to push PSCE growth as banks will remain very weary of who they\nare providing loans to given the current economic situation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Overall Total credit extended to the private sector (PSCE) decreased by N$130.5 million or 0.13% m\/m in March, bringing the cumulative credit outstanding to N$103.6 billion. This is the second consecutive month that we have seen a month-on-month contraction in credit extension. On a year-on-year basis, private sector credit extension \u2026 Continue reading → <\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,22],"tags":[],"class_list":["post-24352","post","type-post","status-publish","format-standard","hentry","category-economicresearch","category-psce"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/24352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/comments?post=24352"}],"version-history":[{"count":1,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/24352\/revisions"}],"predecessor-version":[{"id":24359,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/posts\/24352\/revisions\/24359"}],"wp:attachment":[{"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/media?parent=24352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/categories?post=24352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ijg.net\/research\/wp-json\/wp\/v2\/tags?post=24352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}