Bahrain's Credit Market Shows Resilience with 5.3% Growth in Loans and Facilities

TDT | Manama

The Daily Tribune - www.newsofbahrain.com

Bahrain's commercial banks have witnessed a 5.3% year-on-year growth in total loans and facilities, reaching 12,149.2 million dinars by the end of April 2024. This comes amidst high interest rates, with anticipation of potential reductions later in the year.

Individual Loans Decrease, Business Loans Climb:

While individual loans experienced a 2.9% decline to 5,854.2 million dinars compared to April 2023, business loans exhibited a robust 6.3% growth, reaching 5,292.4 million dinars. This highlights the increasing focus on supporting the private sector and its role in Bahrain's economic growth.

Real Estate and Vehicle Loans See Steady Growth:

Loans secured by real estate saw a 3.4% increase to 2,939 million dinars, while loans secured by vehicles grew by 5.2% to 99.2 million dinars. These figures indicate continued demand in these sectors.

Mixed Performance in Other Loan Categories:

Loans secured by deposits witnessed a significant 22.5% drop to 240.1 million dinars. Similarly, salary-secured loans declined by 3.7% to 1,780.4 million dinars. Meanwhile, credit card loans saw a slight 0.9% decrease to 112.8 million dinars.

Emphasis on SME Financing:

The Central Bank of Bahrain had earlier urged banks and licensed financial institutions to prioritise financing for small and medium enterprises (SMEs). This includes expanding financing targets to allocate 20% of the local financing portfolio to this sector by the end of 2025. The bank also encouraged the creation of dedicated units within credit departments to cater to the specific needs of SMEs.