Mauritius’ household debt soars to reach Rs 145.5 billion in just six months

The new year does not seem to have kicked off on sound grounds, both for Mauritius’ households and the government, according to latest official statistics just released.

As of 31 December 2022, public sector debt and bank facilities granted to private sector entities stood at a cumulated Rs 926 billion, roughly equally divided between the two categories.

But what seems to be more worrying, according to Le Mauricien newspaper, is the increase in household debt in a context of higher interest rates sparked by successive revisions of the Repo Rate by the Bank of Mauritius.

From December 2021 to December 2022, bank facilities to households soared by Rs 19 billion to hit Rs 150 billion. “For public debt, the deterioration is even more glaring in the case of parastatal organisations, with two institutions topping the list: SBM (Mauritius) Infrastructure Development Co Ltd. with a foreign currency debt of Rs 15.6 billion, and the State Trading Corporation, with Rs 10.3 billion in bank loans not guaranteed by the government,” the newspaper reported.

Commercial banks

It added that, at the end of 2022, out of every Rs 100 of loans allocated by commercial banks, at least Rs 32 were directed to households.  Figures also revealed that households’ debts to banks amounted to Rs 145.5 billion, of which just over Rs 100 billion was for mortgage. For the same period in 2021, household debts stood at Rs 126 billion.

After the shock of the COVID-19 pandemic, with tourism at a complete standstill, operators in the hospitality industry borrowed an additional Rs 5 billion – raising total debt for the sector to Rs 54.9 billion.

The debt for other economic sectors (compared to December 2021) was as follows:

• Wholesale and retail: Rs 27.9 billion, up by just over Rs 6 billion
• Real estate: Rs 23 billion, almost the same level as a year ago;
• Manufacturing: Rs 20.1 billion, up around Rs 600 million;
• Construction: Rs 17.4 billion, up slightly; and
• Agriculture: Rs 13.1 billion, up from Rs 10.4 billion.

As at December 31, banks had also given Rs 65.5 billion to financial services operators, up by Rs 9 billion.