Solid breakdown of the sectoral shift in lending patterns. The contrast with 2016-2017 is revealing becuase it shows this isn't just generic credit expansion, its different drivers underneath. I spent some time tracking emerging market credit cycles and the move from NFA to NDA accumulation as the primary M2b driver often signals a pretty significant change in how capital flows. Curious if the pawning category spike indicates household liquidity stress or just easier acess to that form of credit compared to pre-crisis.
Thanks for the detailed response! Yes there is a shift in the sectoral drivers of the credit growth in 2025 compared to the previous ones. Especially in terms of construction, the pick up so far is smaller and weighted more to personal housing than large projects.
The NFA-NDA shift is something to keep an eye on, since its signals the move from immediate post crisis stabilization to a focus on domestic growth. Something I'd look to have a more detailed look in a future article.
Pawning category in particular is quite sensitive to gold price movements. After 2014 there was a downward price adjustment that led to a contraction in pawning. 2016-2017 was just when it was recovering back. Persistence of pawning might also be a reflection of the domestic financial system being dependent on collateral, and gold is the most liquid collateral for most households and MSME owners who need financing quickly.
Solid breakdown of the sectoral shift in lending patterns. The contrast with 2016-2017 is revealing becuase it shows this isn't just generic credit expansion, its different drivers underneath. I spent some time tracking emerging market credit cycles and the move from NFA to NDA accumulation as the primary M2b driver often signals a pretty significant change in how capital flows. Curious if the pawning category spike indicates household liquidity stress or just easier acess to that form of credit compared to pre-crisis.
Thanks for the detailed response! Yes there is a shift in the sectoral drivers of the credit growth in 2025 compared to the previous ones. Especially in terms of construction, the pick up so far is smaller and weighted more to personal housing than large projects.
The NFA-NDA shift is something to keep an eye on, since its signals the move from immediate post crisis stabilization to a focus on domestic growth. Something I'd look to have a more detailed look in a future article.
Pawning category in particular is quite sensitive to gold price movements. After 2014 there was a downward price adjustment that led to a contraction in pawning. 2016-2017 was just when it was recovering back. Persistence of pawning might also be a reflection of the domestic financial system being dependent on collateral, and gold is the most liquid collateral for most households and MSME owners who need financing quickly.