Bahamas’ Credit Access Slumps To Under 50% Of GDP

• Credit to the private sector continued its “long-term decline” during the COVID-19 pandemic to drop below a sum equivalent to 50% of GDP, Moody’s has revealed. 
• The credit rating agency, in its just-published full country analysis on The Bahamas, highlighted the increasing difficulties companies and individuals are facing in accessing loans by disclosing a more than 15 percentage point slump in total outstanding credit over the past decade - a trend that further worsened due to the fall-out associated with COVID-19. 
• “Credit to the private sector has been on a long-term decline for years, with credit to the private sector falling from around 65% of GDP in 2010 to around 50% by end-2019,” Moody’s said. 
• “The IMF credits the contraction in credit to more stringent lending standards, a low-growth environment keeping demand for credit low, and overall, more caution from banks. This trend persisted in 2020 and 2021, with total outstanding credit in June 2021 flat relative to December 2020, and 4% below that of December 2019.

(Source: Moody’s & The Tribune)