- Credit facilities decrease by over 7%: CRIB
- Total outstanding credit balance soars by over 7%
The total credit portfolio of the country in terms of the number of credit facilities decreased by 7.1% Year-on-Year (YoY) during 2022 due to the drop in credit growth amidst the challenging operating environment observed during the year, according to the statistics published by the Credit Information Bureau of Sri Lanka (CRIB).
The CRIB Annual Report for 2022 revealed that whilst the total outstanding credit balance increased by 7.9% YoY to Rs. 15.9 trillion by end-2022 from Rs. 14.5 trillion in end-2021, the total number of credit facilities decreased by 7.1% YoY to Rs. 8.8 million by end-2022 from Rs. 9.4 million in end-2021.
According to the CRIB, this contrast is due to the significant depreciation of the Sri Lankan Rupee during 2022, which it said had “a significant effect in increasing the balance outstanding of non-LKR credit facilities represented in the total balance outstanding”.
Furthermore, 9.6% of the total outstanding credit balance as of end-2022 was recorded with arrears of 90 days or more, up from the 8.6% ratio recorded in 2021. The total outstanding credit balance with arrears of 90 days or more amounted to Rs. 1.5 trillion in 2022, which is a 7.9% YoY increase compared to the Rs. 1.2 trillion recorded in 2021.
In terms of number of credit facilities, the CRIB report notes: “16.6% of the total number of advances 2022 were recorded as credit with 90 days or more in arrears, whereas this ratio for the previous year was recorded as 15.3%. Percentage representation from commercial banks, finance companies, specialised banks, and leasing companies is recorded as 4.4%, 9%, 0.1%, and 3% respectively.”
Speaking to The Sunday Morning Business, CRIB Chairperson Yvette Fernando addressed misconceptions among the public with regard to the operations of CRIB, pointing out that the CRIB was merely a credit database on past/present credit facilities and did not blacklist any individual and/or entity or provide any opinion on their credit risk.
The CRIB merely provided the data and it was entirely up to the bank to determine the credit risk based on their own parameters, she said.
Commenting further, she stated that an increase in Non-Performing Loans (NPLs) had been observed during this year, as the moratoriums and concessions granted to lenders had ended.
“NPLs have shown a slight increase, because moratoriums and concessions were provided for a period of over three years,” she stated.
She explained that lending institutions had been informed to address each situation on a case-by-case basis and to provide reasonable new terms and conditions to facilitate repayment.