However, only 79.4% of loan applications approved

Applications for loans in The Bahamas increased by 5.7 per cent in the first half of 2022, compared to the same period in 2021.

The Central Bank of The Bahamas is reporting that lending institutions processed 14,532 loan applications, reflecting increased demand for consumer loans and mortgages. However, only 79.4 per cent of those loans were approved.

According to the Bahamas Central Bank, “most loan denials were due to high debt service ratios, underemployment and insufficient time on the job”.

Consumer loan applications continued to dominate, representing 88 per cent of the total, 83.4 per cent of which were approved.

“In the mortgage market, the number of applications received grew by 1.9 per cent when compared with the first half of 2021. Further, commercial financing constituted five percent of requests. Demand for commercial credit declined relative to the first half of 2021,” the banking authority reports.

In general, the denial rate across loan application type was between nine per cent and 10 per cent. Central Bank Governor John Rolle reported that credit quality in the local banking sector is improving, saying an improving trend has been established.

“The delinquency rate on private sector credit has declined gradually over the course of 2022. In this context, the Central Bank also continues to deliberately target significant medium-term reduction in delinquencies. Tackling the delinquency rate and increasing the pool of qualified borrowers, which are both favorably influenced by overall economic conditions, are important to stimulating more lending,” Rolle remarked.