Lending to the private sector by commercial banks has expanded over the course of this year, driven by credit growth across industries that play a vital role in the broader economy, according to the April Economic Update Report released by the Maldives Monetary Authority. The growth rate for credit and loans extended to the private sector stood at 13 per cent in February before accelerating to 14 per cent in March, the authority’s report indicates.
Credit distributed to the core sectors of the economy, including tourism, construction, personal borrowing, commerce, and real estate, experienced a broad upward trajectory in March. The most substantial expansion during this period was observed in the volume of capital directed toward the tourism sector, the financial report details.
Credit allocated to that specific industry grew by 12 per cent in March, allowing the tourism sector to maintain its position as the holder of the largest overall share of total credit issued by the nation's banking institutions. Loans disbursed to the tourism industry accounted for 34 per cent of all lending during this timeframe, the central bank’s findings show.
The primary catalyst for this elevated credit allocation within the tourism sector is a surge in financing issued for the development of new resort properties, alongside loans provided for the renovation of existing resorts and guesthouses, the report indicates. A significant portion of Bank of Maldives' lending portfolio is dominated by financing directed toward the tourism industry, the bank has similarly disclosed. Within this specific sectoral lending, the volume of loans issued in US dollars remains notably high, the bank noted.