The Maldives Monetary Authority (MMA) has revealed that the annual growth rate of credit to the private sector by commercial banks accelerated to 5% at the end of December 2022, from 1% at the end of November.
In the Economic Update Report, MMA stated that credit to all major sectors, except for the construction sector, continued to expand in December 2022, whereby personal loans registered the highest growth during the month. Similarly, credit extended to the tourism sector, which accounts for the highest share of bank credit, registered an annual increment of 3% during the month.
MMA stated that the annual decline in credit to the tourism sector was driven by a marked increase in credit lent in the form of working capital, despite the decline in credit lent for new resort development and credit lent for the renovation of resorts. Around USD649 million was lent to tourism businesses and USD1.6 billion was lent in personal loans.
Furthermore, the Quarterly Business Survey published by MMA shows that businesses in all sectors reported an expansion in activity during the fourth quarter of 2022, although the construction sector and transport and communication sector reported a moderation. Employment levels rose for businesses in all the surveyed sectors in the quarter with the tourism sector registering the most notable increase for the second consecutive quarter.