Central Bank of Barbados publishes first bank lending conditions survey showing modest rise in credit demand

The Central Bank of Barbados released findings from its first quarterly Survey of Bank Lending Conditions, covering October to December 2024 and based on responses from the island’s six commercial banks. The survey indicates a modest increase in household and business demand for credit, alongside a modest improvement in banks’ willingness to lend. Consumer loans accounted for most credit requests, while residential mortgages and business loans represented the largest values; banks approved 75 percent of applications, with denials mainly linked to borrower creditworthiness and, for businesses, collateral constraints. For households, improved macroeconomic conditions and modestly lower lending rates offered during seasonal campaigns supported demand for mortgages and consumer loans. For businesses, demand for commercial mortgages was stable versus the prior quarter, while applications rose modestly for business expansion, working capital, and debt refinancing. Lending openness was largely unchanged, although some banks reported higher maximum loan amounts and lower rates, supported by stronger capital positions and seasonal campaigns; borrower indebtedness was cited as a factor weighing on lending decisions. Bankers expect credit demand to grow modestly in the near term, with stronger expectations for residential mortgages, and a greater proportion anticipate modestly improved prospects for lending to businesses and residential mortgages. The Central Bank of Barbados said it will run the survey quarterly to monitor credit demand and banks’ lending posture.