Amount of debt is about Rs 20 bn

The increasing debt level in Mauritius is a matter of concern for the government. The Bank of Mauritius has indicated in its latest newsletter that the amount of debt during the month of December 2010 stood at Rs 19.6 billion.

This figure includes Rs 3.4 billion as overdraft and Rs 14.2 billion as bank loans.

Although households manage to make savings many households incorporate budgeting as a way of managing their monthly expenses debt levels may affect the daily lives of many Mauritians.

According to an analysis of the Bank of Mauritius, Mauritians are indebted as a result of purchases made or expenses over the construction of buildings.

In Mauritius, the culture of real estate investment is already well ingrained and over the years, household debt has increased primarily due to purchases or construction of residential properties.

Personal and business loans are typically used to fund education and for vehicle purchase.

Given the relatively low significance in household debt, credit risk arising from advances on credit cards is not a concern for now.

At the end of September, 2010, housing loans stood at 57.3 per cent while personal advances on credit cards stood at 39.4 per cent.