The approval rate of consumer loans increased to 92 percent during the second half of 2022, the newest data from the Central Bank of The Bahamas' (CBOB) Bank Lending Conditions Survey reveals.

In total there were 16,037 applications received by lending institutions between July and December 2022, representing a 12 percent year over year increase.

"Consumer applications increased by 16.5 percent, year over year, representing 92 percent of total loans processed. Over the same period in 2021, the approval rate firmed to 83.2 percent. Mortgage applications contracted by 22.2 percent, year on year. Relative to the last half of 2021, the approval rate for this category rose by 4.3 percentage points, to 37.9 percent. Commercial credit requests fell by 14.1 percent year on year, attributed to reduced demand in New Providence. Comparable to the second half of 2021, the approval rate rose by 8.3 percentage points, to 90.6 percent. Lenders continued to cite high debt service ratio (DSR), delinquency in prior loans, underemployment and no collateral as top reasons for rejections in the review period," the survey notes.

The loan denial rate stood at 11.1 percent, with 32 percent of reasons being debt servicing above a borrower's threshold. Forty-one percent of denials was for reasons listed as "other".

Regarding mortgages, the majority of loans were for rehabilitation and additions at 41.4 percent, new dwellings mortgages accounted for 33.7 percent and new construction mortgages accounted for 24.9 percent.

The mortgage denial rate was 10.5 percent.

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