Washington, D.C., January 22, 2015 - Bank lending conditions in emerging economies continued to tighten in 2014Q4 as deteriorating funding conditions offset stronger loan demand, according to the latest Emerging Markets Bank Lending Conditions Survey from the Institute of International Finance.
"Even as demand for bank lending has risen, the supply-side has weakened as the financial market volatility in the fourth quarter of last year weighed on bank funding conditions," said Charles Collyns, chief economist at the IIF.
The composite index of the IIF's Survey ticked up 0.2pts to 49.8 in 2014Q4 but remained below the threshold of 50 for the second consecutive quarter, implying a continued tightening in bank lending conditions.
Domestic funding conditions tightened significantly in EM Asia, EM Europe and Sub-Saharan Africa, with EM Asia also witnessing a sharp tightening in international funding conditions, likely reflecting' increased volatility in EM financial markets, in part induced by the' oil price decline. Loan demand strengthened, notably in EM Europe, and the rise in non-performing loans moderated somewhat.
By region, overall bank lending conditions eased in EM Europe, MENA and Sub-Saharan Africa but continued to tighten in EM Asia and Latin America. '
The survey covered 126 EM banks and was conducted between Dec 8, 2014 and Jan 15, 2015.
For more information on the Survey, visit http://www.iif.com/emr/global/emls/.
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The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.