RESERVE BANK POSITIVE OF PRIVATE SECTOR CREDIT GROWTH

The Reserve Bank of Malawi (RBM) is positive that the recent pick-up in the economy, along with declining interest rates will result into a continued growth of private sector credit.

A Monthly Economic Review by RBM showed that credit to the private sector increased by 13.2%. Details of the report also show that the agricultural sector’s credit has expanded by a whopping K3bn.

However, RBM’s Governor Dalitso Kabambe outlined that it was the central bank’s goal to facilitate increased private sector credit against total domestic credit from an average of 9.6%-16% by 2021.

Fast forward from the December 2018 report, Kabambe said that at 33%, domestic debt is outside the 20% debt sustainability threshold while foreign debt is within the debt sustainability threshold of 30 percent, at 27.9%, concluding that the central bank needs to do more to bring domestic debt down to sustainable levels in the coming months and year.