The number of people who took various kinds of loan from the banks in The Gambia and failed to pay has increased considerably in 2013, the Central Bank of The Gambia (CBG) says in a report.
The ratio of Non-performing loans (NPLs), loans given to customers which they failed to pay back, increased significantly, from 12.1 per cent in 2012 to 19 per cent in 2013, the quarterly report, released on Friday, of the Monetary Policy Committee of the CBG states.
The intense competition in the banking industry has left commercial banks in the country rocking the boat of bad debts. This is due to unprecedented increased in lending to both the public and private sectors, which unfortunately led to increased risks of NPLs.
Vulnerable to bad debts
The International Monetary Fund’s mid-2010 report states that though the increased number of banks in The Gambia helped to fuel economic growth.
However, it says increased number of banks has also heralded intense competition among the banks, which makes them vulnerable to bad debts.
The managing director of Sky Bank Gambia, Akim Yusuf, has earlier on said the incidence of loan default is greater and intensive than even the competition, as a risk to the banking system.