By Bernard Mpofu, HARARE, July 24 (The Source) – Total banking sector credit to the domestic economy increased by 16 percent to $4,8 billion in May, from $4,5 billion in April 2015 as the banks increased exposure to agriculture and individual borrowings, latest central bank figures have shown.
The resurgence of tobacco farming has seen more farmers growing the cash crop while the biting economic situation has resulted in increased individual borrowings.
According to the central bank’s latest monthly economic review for May — on a sectoral basis — agriculture had the highest allocation at 18.86 percent; services (17.82 percent); manufacturing (15.05 percent); distribution (14.92 percent); mining (6.28 percent); transport and communications (3.10 ); and construction with 1.03 percent.
“Consumptive borrowing by households remained high at 18.33 percent of total credit to the private sector in May 2015,” the Reserve Bank said.
Credit to the private sector was mainly channelled towards asset purchases at 45.84 percent; inventory build-up, 33.84 percent; consumer durables, 11.15 percent; and vehicle purchases at 3.02 percent.
On a year-on-year basis, growth in credit to the private sector was 4.78 percent in May 2015, up from 4.65 percent in April 2015, the report showed.
During the month of May, loans and advances constituted 82.47 percent of the total credit to the private sector, followed by mortgages advanced by building societies at 11.92 percent and other investments at 3.93 percent.