Yemeni banks granted Houthi militia new financial loans in 2019
English - Sunday 13 October 2019 الساعة 03:47 pm
Aden – NewsYemen.net
The study of macroeconomic developments of the Yemeni economy to the Ministry of Planning, showed that loans and advances of commercial and Islamic banks for government of Houthi militia rose from 12.1% in December 2018, to 18.5% in July 2019, an increase of 6.4 percent driven by the registration of debt service Local government owed to banks that are booked, and new cash loans.
The study pointed out that Local bank loans and advances to public institutions of the Houthi terrorist militia rose from minus 4.8 in December 2018 to 12 percent in July 2019, driven by new cash loans.
The study, funded by the UNICEF Qatari office, said that in return for increased banking sector loans and advances to the Houthi government, credit provided by local banks to the private sector declined by 13.5 percent despite the importance of these loans to stimulate economic activity, and generate employment and income.
In addition to the loans and advances of commercial and Islamic banks to the terrorist Houthi militia, banks pay 24 billion riyals profit tax annually to the Houthi militia, in addition to paying a share of profits vary from one bank to another of which up to 30%, as well as exchange companies and offices pay fees for renewal of licenses, royalties, taxes and effort To the Houthis.
The external liabilities of the banking sector recorded a decline of 57 per cent between December 2018 and July 2019. The study attributed the decline in the external liabilities of the banking sector to the decline in credit - the deposit granted by external banks to local banks - reflecting the weak confidence of external banks in local banks.
The banking sector in Yemen consists of 17 banks, including 9 local privately owned banks, 4 state-owned banks, and 4 branches of foreign banks, all of which are headquartered in the capital Sana'a, which is controlled by the Houthi militia, except for the Yemeni National Bank headquartered in Aden.
Although the Central Bank of Yemen (CBY) raised its GDR interest rate to 27%, the profit on agency deposits to 23%, and the interest rate on government bonds to 17%, local banks favored the Houthi militia, and would not provide any loan to the legitimate government. The Central Bank of Aden, as a result of Hadi's preoccupation with conflicts, accuses corruption of restoring state institutions and gaining the confidence of local banks.
Since the transfer and management of the Central Bank of Yemen to Aden in September 2016, four governors have taken part in managing the Central Bank of Yemen , but disagreements and accusations of corruption between the Central Bank's leaderships and parties have shaken confidence and undermined all measures and policies taken to restore the functions of the Central Bank.
The Saudi $ 2 billion and $ 200 million deposit was the most important factor that kept the price of the national currency "Riyal" and prevented it from collapsing to record levels.
