Credit to the Mozambican economy records fifth consecutive monthly drop

The Bank of Mozambique (BdM) announced on Wednesday, December 20, that the stock of credit to the economy in the country reached 287.1 billion meticais in October, marking the fifth consecutive month of decline. This downward trend has been observed since May, when credit to the economy peaked at 298.1 billion meticais.

According to the monthly Statistical Information report, the fall in the stock of credit to the economy is indicative of a challenging scenario, suggesting a decrease in lending activity by financial institutions. Comparison with the same period in the previous year reveals a timid growth of 0.1%.

Specifically, credit granted to private companies saw a significant reduction of 9.8%, totaling 126.5 billion meticais. In contrast, credit to families showed a notable increase of almost 13%, reaching 130 billion meticais in the period under review.

The BdM pointed out that the adverse economic environment may be influencing companies’ reluctance to seek financing, resulting in a drop in credit to private companies. On the other hand, the increase in credit to families suggests a possible consumer demand for financial products, indicating a different dynamic in this segment.

On the Mozambican banking scene, the report reveals the existence of 15 commercial banks and 12 micro-banks, as well as credit cooperatives and savings and credit organizations. This diversity of financial institutions reflects the complexity of the banking sector in Mozambique and highlights the importance of closely monitoring economic indicators amid changes in credit conditions.

The BoM’s analysis of this data provides a critical view of economic dynamics, enabling strategic adjustments by the financial authorities and banking institutions to stimulate economic growth. Continuous monitoring of these indicators is essential to understanding trends and developing effective policies that can boost the Mozambican economy in the face of ongoing challenges.