Sri Lanka’s credit card debt has fallen sharply since a Coronavirus pandemic hit the country in March 2020, but new card issues have started to pick up in 2021, though the outstanding debt is stagnant, official data show.

Sri Lanka’s active credit cards fell from 1.86 million in March 2020 to 1.82 million in May as credit card defaults also picked up.

Defaulted credit cards rose from 139,492 in the fourth quarter of 2019 to 167,834 thousand in the second quarter amid Coronavirus lockdowns.

By the third quarter defaulted cards had stabilized at 169,728.

Outstanding credit card debt which has been rising steadily with usage going up also contracted sharply after March 2019.

Credit card customers are billed every month, and some consumer durables and items can be purchased on installments through credit card, leading to higher outstanding debt which is not in default.

Total credit card debt which had grown to 122 billion rupees by March 2020 from 107 billion rupees 12-month earlier started to fall.

Active cards which fell to about 1.82 million during the lockdowns had picked up to around 1.89 million data show.

Active cards exceeded a pre-Coronavirus level in July 2020 as the economy re-opened. In January active cards rose by 14,985 to a new high of 1.894 million exceeding an October 2020 figure, when a second wave of Coronavirus infections started.

Outstanding credit fell to a low of 115.63 billion rupees in October 2020, and has since marginally moved up to 117.2 billion rupees, but is still below pre-Coronavirus levels. 

–ECONOMYNEXT-