The Unassuming Economist

The IMF’s new report on the Maldives says that: “Careful monitoring is warranted, supported by prudential measures on housing. Private sector credit has grown rapidly, led by the housing and construction sector. Banks’ credit to the private sector has continued to grow, driven by lower NPLs and an accommodative monetary policy stance since 2015. Banks require 150 percent of collateral on loans extended and a 20–25 percent down payment as insurance against default risk, which households can meet by drawing on their pension assets. In the context of a sharp increase in housing-related loans and exposure of the Maldives Pension Administration Office (MPAO), careful monitoring is recommended.”