Subdued demand from businesses and low credit collectability are weighing on
On the supply side, credit growth is also negatively impacted by worsened expectations for the overall economic activity and the risk associated with required collateral, the report read. These factors will continue to negatively affect credit supply in the near-term, the bank added. On the other hand, sources of bank financing tend to become more accessible as banks are increasingly relying on local household and corporate deposits and on international financial institutions to finance their operations, NBS also said.
Loan demand, which has been weakening in
The central bank also said that credit demand is recovering faster than loan supply as banks are currently restructuring their balance sheets and adjusting their financing strategies to rely more on the local sources of funding.
The average monthly lending growth in the country slowed to just 0.6% in 2013 from 16.4% a year ago due to falling corporate loans after the end of the government-subsidised lending programme in March.
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