TOTAL outstanding loans issued by commercial banks at $256.9 billion up to March 2010 slightly declined year over year despite a number of loan categories showing sizeable loan jumps.

Total loans declined by 0.8 per cent over the review period due to marked reductions in tourism from $44.2 billion to $38.3 billion; manufacturing from $9.2 billion to $9 billion; food drink and tobacco from $3.7 billion to $2.5 billion; financial institutions from $1.3 billion to $971.3 million; transport, storage and communication from $12.4 billion to $9.6 billion; and personal loans from $91.5 billion to $89.7 billion.

Those which showed sizeable increases over the review period included construction and land development at $15.6 billion from $15.1 billion; agriculture at $6.3 billion from $4.5 billion; government services at $37.5 billion from $34.3 billion; furniture, fixture and footwear at $462 million from $281.7 million; cement and clay products at $1 billion from $599 million; chemicals at $933.6 million from $235 million; entertainment at $505.7 million from $491.5 million; and distribution at $25.3 billion from $25.1 billion.

Total loans have doubled from $132.4 billion in 2005 to its current level, however, the pace of growth has slowed. The last calendar decrease in total loans was in 1999 at $36.7 billion from $43 billion in 1998.

A related statistic indicates that investors are finding it harder to repay loans. Specifically, Non-performing loans (NPLs) across the financial sector jumped 78 per cent over 12 months to $19.4 billion to March 2010 which equals investments in failed FX trading firm Olint, which was partially blamed for the rise. Trend data provided by the Bank of Jamaica showed that NPLs, which are unserviced over three months, jumped over 12 months by $8.5 billion to $19.4 billion as at March 2010.

The size of NPLs across the financial sector jumped for the second straight quarter having eased in September. In 2009 NPLs were $10.6 billion in March; $14.6 billion in June; $14.2 billion in September; $16.4 billion in December; and $19.4 billion in March. NPLs accelerated in the June quarter of 2008, when the local recession reduced economic activity and employment.