The latest Financial Stability Report from the Bank of Mauritius indicates that credit to the corporate sector remained robust in late 2025, supporting economic activity despite rising risks in the property market. In December 2025, bank lending to businesses grew by 10.8% annually, a pace consistent with the first half of the year, contributing to an overall 11.4% increase in private sector credit for the year. This sustained demand reflects healthy business results, favorable financing conditions, and a resilient banking sector.
Several sectors, including manufacturing, professional services, and construction, drove this credit expansion, highlighting ongoing investment and operational needs. The sector’s aggregate debt levels remain manageable, with the debt-to-GDP ratio staying below historical averages, indicating that companies retain a strong capacity to service their borrowings. The composition of bank credit remains stable, with loans constituting over 84% of total corporate credit, limiting exposure to market and liquidity risks associated with traded instruments.
However, sectoral disparities have emerged, notably in real estate, where asset quality has deteriorated in construction and property activities. While banks possess sufficient capital and liquidity buffers to absorb potential losses, these vulnerabilities warrant close monitoring. The report warns that geopolitical tensions and global economic uncertainty could impact corporate performance, especially for exporters and firms reliant on international markets.
Additionally, credit in foreign currencies grew by nearly 10% in the second half of 2025, driven by manufacturing, construction, and agriculture sectors seeking financing for import needs and raw material purchases. Overall, while the banking sector’s resilience remains intact, the evolving risks underline the importance of cautious lending and vigilant risk management.