Governor of the Central Bank of Seychelles, Caroline Abel, has noted the institution’s satisfaction with efforts by commercial banks to lower interest rates for loans, as urged by CBS since June.
In the Central Bank of Seychelles (CBS) press update yesterday at the International Conference Centre of Seychelles (ICCS), Governor Abel explained that following her pronouncements in September warning commercial banks that measures would be taken if they did not lower the rates to support the economy, various banks have taken individual actions to lower interest rates.
“For mortgages the numbers are now in single digits and in some cases some business loans are also in single digits and Central Bank is satisfied with the actions that the banks and other institutions under our portfolio have done,” stated Governor Abel.
“We have received commitments that we will see further reductions in the couple of months ahead in 2022,” she added.
Indicative interest rates ? the average rates on loans in the country ? shows this positive decline for bank customers.
The average rate for housing loans have dropped from 7.6% to 6.7%, secured business loans have gone from 11.3% to 10.6% while unsecured business loans are now at an average of 15.3% compared to 16.9% before October 25.
Governor Abel further took the opportunity yesterday to urge businesses that are benefitting from this reduction of interest loans ? never mind the upsurge in the economy and the stability in local currency ? to pass on these benefits to their clients.
Nonetheless, Governor Abel is encouraging and placing emphasis on loans for productive sectors and construction of houses rather than personal loans for consumption.
CBS’ credit facilities update
Governor Abel noted that CBS has observed a reduction in applications for the two credit facilities available to micro, small and medium-sized enterprises (SMSEs) and large businesses.
Statistics from participating institutions show from the start a total of 444 requests for credit assistance from MSMEs and 34 from large enterprises, up to October 27, 2021,
Out of these requests, 290 applications were approved for MSMEs at a combined sum of R125.6 million and 26 applications from large enterprises at R293.5 million.
Most of the applications hail from the tourism, trade, transport and construction sectors.
Foreign exchange market developments
Since September, CBS has observed the trend wherein demands for foreign exchange have superseded its supply.
“In October this year we saw a supply of US $56.183 million and a demand of US $58.1 million which means the market made a loss of US $1.27 million. Compared to September when we lost US $8.27 million. As for November, up to Friday November 5, the amount of foreign exchange that have been sold in the system is US $11 million and a demand of US $13.1 million, meaning that we have lost US $1.2 million,” said Governor Abel.
Source: Seychelles Nation
