Lending to businesses continued to fall

The loan portfolios of second tier banks grow only at the expense of the population.

f42bf75255155686dbf6fc3c78470fa3 - Lending to businesses continued to fallphoto: veritasjus.com

Another decline in the volume of loans, issued to small businesses, has become for the Bank a bad sign. The country’s leadership has set the task is the opposite – to increase lending by lowering the cost of money.

As follows from a regular press release of the regulator,

lending to small businesses over the last month of summer has decreased by 5.1%

— up to 2 trillion 130.8 á billion tenge.

In absolute terms, the August decline in this indicator totalled 114,4 billion, and the share of small borrowers in the total lending to the economy fell over the month from 17.2% to 16.1%.

A negative trend has developed and the volume of lending to domestic small and medium-sized businesses. Summary data from the regulator shows that since the beginning of the year there happened a decline of 11.5 per cent to 4 trillion 42.3 billion tenge as of August 1, in absolute terms – by 524,8 billion tenge. The share of such loans in total loan portfolio decreased from 33.2% to 29.5%.

The composition of the loan portfolio of the banking sector of Kazakhstan

7d49abdbb0c460b86c7409d78595dfdd - Lending to businesses continued to fall

The population borrows permanently

Overall, the volume of Bank loans increased in August by 1.3% (to 13 trillion 224,1 bln tenge), including legal entities — 0.4% (up to 7 trillion 72,4 billion), individuals – by 2.3% (to $ 6 trillion to 151.8 billion).

For tenge-denominated loans has developed an increase of 1.8% — up to 10 trillion 894,2 billion tenge, while foreign currency loans decreased by 0.9% — up to 2 trillion 329,9 billion, the Main part of issued loans were long-term. And in August, their volume increased by 1.4% to reach 11 trillion 316,0 billion tenge, and short-term loans growth has made 0,7% — to 1 trillion 908,1 billion.

In the sectoral breakdown, the largest volume of lending occurred in:

  • industry (13.9% of the total volume);
  • trade (12,9%);
  • construction (5,1%);
  • transport (3.8 per cent).

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