Somalia: Bank credit to the private sector
* indicates monthly or quarterly data series
| Somalia |
Bank credit to the private sector as percent of GDP |
|---|---|
| Latest value | 5.43 |
| Year | 2024 |
| Measure | percent |
| Data availability | 1960 - 2024 |
| Average | 6.38 |
| Min - Max | 1.96 - 25.41 |
| Source | The World Bank |
The latest value from 2024 is 5.43 percent, an increase from 5.07 percent in 2023. In comparison, the world average is 49.24 percent, based on data from 145 countries. Historically, the average for Somalia from 1960 to 2024 is 6.38 percent. The minimum value, 1.96 percent, was reached in 1960 while the maximum of 25.41 percent was recorded in 1974.
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* indicates monthly or quarterly data series
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Bank credit in Somalia and other countries is defined as the credit extended by the banking institutions to the private sector only: both firms and households. It does not include lending to the government.
Credit is essential for the economy to function well. It funds new investments and allows people to purchase houses, cars, and other items. Of course, excessive lending and borrowing usually end up in financial crises but, in principle, credit availability is good for economic development.
If the banking credit to the private sector is about 70 percent of GDP and more, then the country has a relatively well developed financial system. The amount of credit can even exceed 200 percent of GDP in some very advanced economies. In some poor countries, the credit could be less than 15 percent of GDP. In these countries, firms and households essentially do not have access to credit for investment and various purchases.
Credit is essential for the economy to function well. It funds new investments and allows people to purchase houses, cars, and other items. Of course, excessive lending and borrowing usually end up in financial crises but, in principle, credit availability is good for economic development.
If the banking credit to the private sector is about 70 percent of GDP and more, then the country has a relatively well developed financial system. The amount of credit can even exceed 200 percent of GDP in some very advanced economies. In some poor countries, the credit could be less than 15 percent of GDP. In these countries, firms and households essentially do not have access to credit for investment and various purchases.
Definition: Domestic credit to private sector by banks refers to financial resources provided to the private sector by other depository corporations (deposit taking corporations except central banks), such as through loans, purchases of nonequity securities, and trade credits and other accounts receivable, that establish a claim for repayment. For some countries these claims include credit to public enterprises. This indicator is expressed as a percentage of Gross Domestic Product (GDP) which is the total income earned through the production of goods and services in an economic territory during an accounting period.
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| Related indicators | Latest | Reference | Measure |
|---|---|---|---|
| Percent people with credit cards | 0.59 | 2014 | percent |
| Percent people with debit cards | 2.36 | 2014 | percent |
| Domestic credit to the private sector | 16.05 | 1989 | percent |
| Bank credit to the private sector | 5.43 | 2024 | percent |
| Percent people with bank accounts | 7.86 | 2014 | percent |