The latest Financial Services Regulatory Authority (FSRA) Quarterly Statistical Bulletin – Quarter 3 2024 reveals that there was a 52.95% drop in non-performing loans (NPLs) in the credit institutions sector compared to the previous quarter.
This sharp decline contributed to a 1.44% quarterly reduction in the non-performing loan ratio, indicating improved loan repayments and stronger credit risk management among institutions.
Credit institutions’ overall assets grew by 0.87% during the quarter, reaching E4.67 billion. On an annual basis, assets increased by 4.30%, largely due to an increase in long-term loans and advances.
Meanwhile, liabilities rose by 1.49% quarter-on-quarter and 8.32% year-on-year, with amounts owed to related parties and other financial liabilities accounting for 64.97% of total liabilities.
The equity position of credit institutions, however, declined by 2.42% quarterly and by a sharp 13.52% annually, mainly due to reductions in share capital. This downward trend in equity suggests that institutions may be facing capital constraints, which could impact their ability to expand lending activities.
The data also indicates a shift in lending patterns, with long-term loans declining by 0.59% over the quarter, reflecting reduced lending activity. In contrast, short-term lending saw a notable increase of 6.41%.
On an annual basis, long-term loans and advances still showed a modest increase of 2.51%, while short-term loans recorded a 3.25% rise.
In terms of market share, Select remains the market leader in total assets, holding a 38.28% share, reflecting a 1.44% decline from the previous quarter. Meanwhile, when it comes to loans and advances, First Finance leads with a 28.44% market share, followed by Select, Letshego, and Amandla.