NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, December 8, 2015

Africa’s banks are under pressure from non-performing loans, credit agency Moody’s said on Tuesday.

“We expect the level of non-performing loans (NPLs), which we currently estimate at around 8-9 percent of gross loans, to rise further in 2016,” a note released by the agency read.

The main pressures on African banks stem from slowing growth, lower commodity prices and currency depreciation that are affecting many African economies, the note said.

“Combined with structural challenges, such as infrastructure bottlenecks, weak governance and fiscal imbalances, these factors will continue to threaten African banks’ asset quality metrics,” Moody’s added, but claimed that the overall outlook for African banks is stable.