Policies aimed at financial sector deepening and increasing access to credit are of essence to enhancing economic performance. However, the magnitude of the impact is smaller once factors such as the labour employed and past economic performance of the sectors are taken into account.
We find a positive and significant impact of credit on sectoral gross domestic product measured as real value added.
This paper investigates the impact of access to bank credit on the economic performance of key economic sectors using sectoral panel data for Kenya. When credit is expanding, consumers can borrow and spend more and businesses can borrow and invest. It is easy to understand how rapid credit growth facilitates economic growth. In other words, credit has been growing much more rapidly than the economy for the past four decades. The non-food bank credit grew 13.7 per cent in June 2022 from 4.9 per cent a year ago.Despite the growing literature on financial development-economic growth nexus, there is paucity of empirical studies that explore the impact of access to credit and economic performance at the sectoral country level, as an increasing number of studies largely focus on cross-country analyses. In 1971, the ratio of total credit to GDP was 150. While the job gains were double, the upwardly revised April total. The US jobs report came in south of expectations, with non-farm payrolls increasing by 559,000 in May but the unemployment falling to a pandemic low of 5.8 vs 6.1 in April. These lenders account for about 93 per cent of the total non-food credit deployed by scheduled commercial banks. US jobs report fails to reinforce tapering narrative bad news is good news. It was 9.9 per cent in March 2022.ĭata on sectoral deployment of bank credit for June was collected from 40 scheduled commercial banks. Credit growth to agriculture and allied activities amid the onset of monsoon and the kharif sowing season was 13 per cent in June 2022 (against 10.6 per cent in June 2021). The growth in loans to the services sector was 8.9 per cent in March 2022.
#CREDIT ECONOMIX PROFESSIONAL#
This is mainly due to improved offtake by non-banking financial companies (NBFCs), professional services and transport operators. Retail credit grew YoY at 12.4 per cent in March 2022.Ĭredit to the services sector grew by 12.8 per cent in May 2022 (4 per cent a year ago). It was primarily driven by housing and vehicle loans. The retail loans segment retained its uptrend and grew 18.1 per cent in June 2022 vis-a-vis 12.2 per cent in the same month in 2021. The current growth should also be seen in the backdrop of weak demand in June last year due to economic disruption caused by the second wave, they added. Bankers said the rise in credit offtake now is partly driven by expansion in economic activity.Īlso, higher working capital limits due to rising input costs and some shift to bank loans from costly market borrowing have led to an uptick in credit demand from industry.
are ranked and placed in economic tiers using the following factors. The large industries segment saw a credit growth of 3.3 per cent against a contraction of 4.8 per cent in June 2021. Provides for a statewide job tax credit for any business or headquarters of any. The credit growth to micro and small industries rose to 29.6 per cent from 11.6 per cent a year ago. Size-wise, credit to medium industries grew 47.6 per cent YoY in June against 59 per cent in the same month last year. Reserve Bank of India (RBI) data showed that credit to industry grew 9.5 per cent in June 2022 (against a contraction of 0.6 per cent in June 2021). The pace of credit offtake continued to be robust in June, with sectors clocking year-on-year (YoY) growth between 9.5 per cent and 18.1 per cent.
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