Credit demand accelerates in November
The fifth month in a row of overall credit growth shows a healthy improvement in corporate lending
Demand for private sector credit accelerated at its fastest pace in nine months in November, with corporate loans picking up significantly.
Private sector credit extension rose 2.46% year on year in November, up from 1.29% in October, and marking a fifth consecutive month of growth.
The consensus forecast, according to macroeconomics website Trading Economics, was for 1.5% growth.
Month on month, credit demand rose 1.6% in November, the highest observed since March 2020, said Nedbank Group Economic Unit economists Liandra da Silva and Nicky Weimar in a note.
Corporate loans recorded the highest annual growth rate observed since April 2020, accelerating from 0.7% in October to 3.2% in November. “This is a positive development given that the uncertain economic environment has weighed on corporate credit demand for over a year,” the economists said.
Covid-19 has prompted many companies to prioritise debt reduction and put off expansion plans, given the high levels of uncertainty generated by the pandemic.