Emerging market bank lending conditions continued to tighten in 2015Q2, albeit at a more moderate pace, according to the latest quarterly Emerging Markets Bank Lending Survey by the Institute of International Finance.
“Credit standards continued to be tightened as funding conditions worsened and non-performing loans increased amidst a challenging growth environment in many emerging markets,” said Felix Huefner, chief economist, global macroeconomics at the IIF. “This worsening of supply conditions has largely offset more positive news of higher loan demand, notably in Emerging Europe.”
Lending conditions have tightened in each of the last four quarters. In 2015Q2, the composite index for EM bank lending conditions ticked up 0.9 points to 49.0 but stayed below the threshold of 50, implying that bank lending conditions continued to tighten but at a somewhat more moderate pace.