The second half of 2018 saw a rising demand for credit coupled with a slightly improved success rate in consumers being granted credit, Central Bank of The Bahamas (CBOB) Governor John Rolle said yesterday.
According to the most recent survey on lending conditions conducted by CBOB, approximately 23,879 loans were processed in the final six months of 2018, with an average approval rate of 81.8 percent.
However, although loan volume expanded over the review period, the average loan values declined, the CBOB said.
Consumer loan applications dominated (92.4 percent of all loans), with approximately 82.7 percent approved while New Providence held the majority of loans (82.5 percent), the survey found.
The survey further found that 39 percent of loans were denied due to a high debt service ratio, 29 percent were denied due to insufficient or no collateral, 11 percent due to insufficient time on a job, 6 percent due to underemployment, 4 percent due to no down payment as well as delinquency in prior loans, 2 percent due to unverifiable income and 5 percent for unspecified reasons.
“There were unsuccessful applications as is the norm. When applicants did not have their loan requests approved, the reasons most commonly stated by lending institutions were that the applicants were already too heavily in debt, or that applicants would be pushed to that point if they were given the request loans. The next major category for major denial was for persons who were just not employed long enough,” Rolle said during a press conference at CBOB yesterday.
The majority of approved consumer loans were for the consolidation of debt, followed by travel, then a miscellaneous category, followed by credit cards, private cars, home improvements, education, then land purchases, medical, furnishings and appliances, taxis and rented cars and the least amount for commercial vehicles.
Paige started working as a business reporter in August 2016.
Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News
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