Credit to the private sector grew by 14.4% in 2023. According to the 2023 Annual Report of the Private Sector Commission Limited, the 14.4 % increase in credit was reflected in the services, manufacturing, and agriculture sectors. Credit to the private sector is important because it allows businesses to borrow and invest, impacting job creation and increasing revenue and profits.
The World Bank defines domestic credit to the private sector as “financial resources provided to the private sector by financial corporations, such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment.”
In 2023, credit to the private sector in the services, manufacturing, and agriculture sectors stood at 12.9%,15.8%, and 14.7% respectively.
The PSC’s annual report attributes the increase in the domestic credit to these sectors as resulting from increased lending towards paddy production in the case of the agriculture sector and increased credit for engineering and construction in the manufacturing sector.
The rise in credit to the private sector supported several economic activities such as professional services, construction and engineering, distribution, automobiles, food, beverage, tobacco, manufacturing, and transportation services.