The criteria for approving loans to companies became slightly stricter in Cape Verde in the first quarter of the year, while the criteria for individuals remained unchanged, according to a central bank survey conducted by Lusa this Friday.
According to the credit market survey recently released by Banco de Cabo Verde (BCV), the criteria became more stringent in the first three months of the year, especially for long-term loans.
The increase is due to the level of default, risks associated with companies without organized accounting, and less favorable expectations about economic activity in general.
On the other hand, BCV found that the approval criteria for loans to individuals remained unchanged.
“The terms and conditions for approving new loans have remained unchanged for both corporate and personal loans,” the Cape Verdean financial regulator said.
According to the same source, in the period under review, the surveyed banks recorded a slight decrease in demand for credit from companies and a slight increase from individuals, both for housing purchases and for consumption and other purposes.
“Over the next three months, banks expect to apply slightly less restrictive criteria in the approval of loans for both companies and individuals,” BCV said in a statement, indicating that banks also foresee a slight increase in demand for loans from companies and individuals. faces.
The general terms and conditions applicable to the approval of new loans have remained unchanged for both company loans and loans to individuals.
The share of applications for business loans rejected by banks increased slightly, while the share of rejected applications for loans for individuals remained unchanged.
Between January and March, Banco de Cabo Verde found that the demand for bank financing from companies as a whole declined slightly, which, according to banks, was due to the use of alternative sources of financing, namely loans from non-state banking financial institutions and the issuance / redemption of debt securities.
In the case of individuals, the demand for bank financing for home purchases, consumption and other purposes has increased slightly, according to banks, reflecting the outlook for the housing market, the need for investment financing, the use of household savings, consumer confidence and the general level of interest rates.
“Over the next three months, banks are forecasting a slight increase in demand for loans for both companies and individuals,” BCV said in a note summarizing the results.
At present, the financial system of Cape Verde includes 10 institutions authorized to operate at the national level under the control of the Banco de Cabo Verde, eight of which are authorized commercial banks and two insurance companies.
Lusa reported in February that commercial banks operating in Cape Verde recorded a historic profit of 4,663 million escudos (42.5 million euros) in 2022, up 26.5% from the previous year.
Author: Portuguese
Source: CM Jornal
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