Markets & Finance
Business optimism dips as banks cut lending, survey shows
Tuesday November 01 2016
Businesses lowered their production levels by an average 5.3 per cent to accommodate the drop in demand. PHOTO | FILE
Banks have reduced lending to the business community resulting in a drop in local demand for goods that has pulled down optimism in the market place, a survey by Standard Chartered Bank shows.
The lender's Business Sentiment Indicator (BSI) - a survey that measures how optimistic businesses feel about current and future economic conditions - dropped to 61.3 in October from 63.7 points a month earlier, indicating a gloomy market.
“Fall in the new orders and production indicators drove the headline indicator lower as firms reported that domestic demand dipped in October,” said Stanchart Tuesday.
Businesses lowered their production levels by an average 5.3 per cent to accommodate the drop in demand.
StanChart’s BSI surveys 200 small and large companies in Nairobi and Mombasa on a monthly basis.
READ: SIB research shows rate capping to hit Co-op Bank the hardest
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