Risk premium on lending (lending rate minus treasury bill rate, %) - Country Ranking

Definition: Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability.

Source: International Monetary Fund, International Financial Statistics database.

See also: Thematic map, Time series comparison

Find indicator:
Rank Country Value Year
1 Madagascar 47.76 2018
2 Brazil 31.77 2018
3 Tajikistan 28.66 2017
4 Angola 20.55 2018
5 The Gambia 19.06 2018
6 Malawi 18.68 2018
7 Lao PDR 14.64 2010
8 Kyrgyz Republic 13.93 2018
9 Mauritania 12.33 2017
10 Rwanda 11.85 2018
11 Jamaica 11.73 2018
12 Guyana 11.46 2018
13 Tanzania 10.99 2018
14 Solomon Islands 10.28 2018
15 Uganda 10.04 2018
16 Sierra Leone 9.97 2018
17 Cabo Verde 7.97 2018
18 Belize 7.91 2018
19 Bolivia 7.76 2017
20 Trinidad and Tobago 7.59 2018
21 Ethiopia 7.32 2008
22 Bangladesh 7.28 2018
23 Seychelles 7.12 2018
24 Bulgaria 7.08 2015
25 Antigua and Barbuda 7.00 2018
26 Nigeria 6.82 2018
27 Mozambique 6.75 2018
28 Armenia 6.57 2018
29 Mongolia 6.16 2017
30 St. Lucia 6.13 2018
31 Dominica 5.96 2018
32 St. Vincent and the Grenadines 5.89 2017
33 Montenegro 5.76 2018
34 Algeria 5.64 2018
35 Yemen 5.43 2013
36 Albania 5.37 2017
37 Kenya 5.30 2018
38 Guinea 5.17 2000
39 Singapore 5.13 2013
40 Bahrain 5.08 2014
41 Mauritius 5.05 2018
42 Iraq 5.00 2014
43 Barbados 4.92 2018
44 Lesotho 4.89 2018
45 Lebanon 4.66 2018
46 Fiji 4.39 2017
47 Grenada 4.18 2018
48 Malta 4.13 2013
49 Moldova 4.08 2018
50 Georgia 3.87 2018
51 Hong Kong SAR, China 3.73 2018
52 Papua New Guinea 3.66 2017
53 Australia 3.35 2013
54 Israel 3.27 2018
55 Czech Republic 3.06 2018
56 New Zealand 3.00 2017
57 United States 2.97 2018
58 South Africa 2.93 2018
59 Vietnam 2.89 2015
60 Thailand 2.84 2018
61 Uruguay 2.82 2018
62 Eswatini 2.61 2018
63 Italy 2.56 2018
64 The Bahamas 2.56 2018
65 Romania 2.54 2018
66 Philippines 2.51 2018
67 Namibia 2.50 2018
68 Iceland 2.23 2018
69 Azerbaijan 2.22 2017
70 Pakistan 2.21 2017
71 Canada 2.18 2017
72 St. Kitts and Nevis 2.03 2013
73 Malaysia 1.79 2016
74 Hungary 1.43 2018
75 Sweden 1.35 2006
76 Japan 1.20 2017
77 Sri Lanka 0.62 2018
78 Libya 0.58 2004
79 Mexico 0.46 2018
80 United Kingdom 0.12 2014
81 Egypt -0.56 2018
82 Serbia -0.83 2015
83 Zambia -5.07 2018

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Development Relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy.

Limitations and Exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm.

Statistical Concept and Methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.

Periodicity: Annual