Bank credit ratios
Author: Mohamed Sherif Abu Maysam
13/8/2018 12:00 am
Credit rates in the banking sector are among the most important criteria of economic development accounts.
The main function of the banking sector is to stimulate savings in order to attract the cash mass, increase the percentage of deposits and then circulate them by offering loans to the public to finance projects, large or small, In order to create sustainable development for the real sectors and sectors through the sustainability of credit granting, thus contributing to the sustainability of the rotation of the wheel of the macro economy.
According to data from the Central Bank of Iraq, the cash mass issued amounts to about 40 trillion dinars, but the proportion of available in the arena of banking does not exceed 30 percent, while the mass of cash condensed about 70 percent of cash out, which means that only nine trillion, is In the arena of banking.
Recently, the Central Bank of Iraq, revealed that 44 private banks did not contribute more than 10 percent of credit, and this ratio is very low compared to the rates of support received by private banks over the course of the fifteen years Past.
Because the ratio of credit to deposits means that the credit granted does not exceed a certain percentage of deposits, which means that the financial institutions increase their deposits if they want to increase the proportion of banking facilities they provide, the contributions of private banks appear very low despite the initiative of the Central Bank regarding granting more than trillion and 200 thousand Billion dinars at a low interest rate to private banks in support of small projects And medium.
Thus, these indicators appear to be inconsistent with the directions of the Association of Private Banks in support of the program of financial inclusion adopted by the Central Bank to withdraw the cash mass and then recycled by raising credit rates in order to stimulate the business market and then turn the economy towards real development contribute to macroeconomic output From the recession that has been going on for years.
Private banks are called upon today, more than at any other time, to exercise their role in the financial coverage programs on the ground and outside the seminar halls, and to launch initiatives to open accounts for small age groups coupled with future incentives and for other age groups and sectors, ,
As long as these banks have made significant progress towards the introduction of banking technologies and payment systems through electronic payment services towards the achievement of financial inclusion and the creation of the community Cash.