Business
4.29% Gap: Banks Face Scrutiny Over Meagre Savers’ Interest vs. Loans
Mauritian Banks are facing intense scrutiny after new figures revealed a striking 4.29 percentage point gap between the average interest rates they offer savers and those they charge borrowers. This significant disparity highlights a major divergence in how financial institutions treat deposits versus loans.
Stark Difference Between Savers and Borrowers
The data indicates that while the average rate applied to loans stands at 6.84%, the average rate applied to deposits is a meagre 2.55%. This 4.29% difference represents the gulf between what the banks earn from lending and what they pay out to those who entrust them with their savings.
Individual rates offered to customers show substantial volatility:
- Saving Rates: The interest rate offered to savers (the ‘deposit rate’) is currently oscillating between 2.95% and 3.4%.
- Borrowing Rates: Conversely, the Prime Lending Rate—the benchmark rate for borrowers—is listed as being between 6.65% and 9%.
The wide range in both saving and borrowing figures underscores the variation in the financial landscape for both consumers and businesses.
Key Financial Figures
- Bank Rates : Up to 3.4% for savings and 9% for loans.
- Savings Deposit Rate : Between 2.95% and 3.4%.
- Prime Lending Rate: Between 6.65% and 9%.
- (Note: The Key Rate is 4.5%).
- Weighted Average Rate for Deposits : 2.55% in September.
- Weighted Average Rate for Loans : 6.84% in September.
- The gap between the loan and deposit rate :4.29%.
- Analysis: The average rate on deposits remained at 2.55% in September, while the average rate on loans stood at 6.84%, resulting in a gap of 4.29%.
On the side of new loans, the rates remained relatively stable around 6.75%, despite growing demand from households and businesses.
- New loans to businesses averaged 6.77%, mainly in the commerce and construction sectors, which represent nearly 50% of outstanding business loans in September.
- In parallel, the average rate on new loans to households progressed to 7.55%, with a specific rate of 5.95% for housing loans.
Weighted Average Interest Rates on New Loans to Businesses and Individuals (Jan – Sept)
| Sector (Secteur) | Jan (Janvier) | Feb (Février) | Mar (Mars) | Apr (Avril) | May (Mai) | Jun (Juin) | Jul (Juillet) | Aug (Août) | Sept (Sept.) |
| Agriculture, forestry, and fishing (Agriculture, sylviculture et pêche) | 4.66% | 5.83% | 6.12% | 5.25% | 6.01% | 6.48% | 4.77% | 5.87% | 6.39% |
| Manufacturing sector (Secteur manufacturier) | 6.49% | 6.86% | 6.99% | 6.8% | 7.02% | 6.57% | 6.89% | 7.32% | 6.59% |
| Construction (Construction) | 4.92% | 8.2% | 7.81% | 7.71% | 8.37% | 7.54% | 7.48% | 8.18% | 8.19% |
| Commerce (Commerce) | 5.91% | 6.46% | 6.64% | 6.48% | 6.33% | 6.28% | 6.56% | 6.96% | 6.07% |
| Transport and warehousing (Transport et entreposage) | 6.53% | 7.07% | 8.14% | 7.6% | 7.82% | 7.71% | 8.58% | 8.29% | 7.83% |
| Accommodation and catering (Hébergement et restauration) | 6.7% | 6.46% | 6.99% | 6.44% | 7.52% | 6.48% | 6.88% | 6.24% | 6.49% |
| Information and communication (Information et communication) | 7.61% | 7.79% | 8.05% | 5.23% | 6.05% | 8.25% | 6.31% | 8.26% | 8.73% |
| Real estate sector (Secteur de l’immobilier) | 6.78% | 7.18% | 7.43% | 7.39% | 6.87% | 6.53% | 7.53% | 6.88% | 7.61% |
| Education (Éducation) | 8.67% | 8.06% | 8.86% | 7.79% | 9.69% | 9.23% | 7.64% | 8.3% | 7.55% |
| Households (Ménages) | 6.55% | 7.19% | 7.27% | 7.39% | 7.09% | 6.67% | 7.55% | 7.43% | 7.55% |
Source: Defi Media