Credit to private sector dips in April

Credit to the private sector in April fell by Rs. 16 billion from March in a sign of less optimism as well as due to holidays in connection to Sinhala-Hindu New Year.

April data buckled March’s sharp rise in private sector credit to Rs. 72 billion ahead of the festive month.

The dip in April also reinforces concern mostly by micro, small and medium enterprises (MSMEs) that lending rates are still high despite low policy rates (see https://www.ft.lk/top-story/Banks-slower-in-cutting-lending-rates-faster-on-deposits/26-762217)

Outstanding credit to the private sector as at May was Rs. 7.377 trillion down from Rs. 7.393 trillion in March. As against April last year, the outstanding figure was up by 4%.

The Central Bank recently insisted there is more room for lending rates to come down and expressed hope of a pick-up in private sector credit from May onwards 

(See https://www.ft.lk/top-story/CBSL-insists-lending-rates-can-come-down-further/26-762328)