The ongoing credit crunch is having a profound impact on the global economy. Banks are becoming increasingly risk-averse, leading to stricter lending criteria and reduced availability of credit for businesses and individuals.

Impact on Businesses

Small and medium-sized enterprises (SMEs) are particularly vulnerable to the credit squeeze. Many SMEs rely on loans and credit lines to finance their operations and growth. With access to credit becoming more limited and expensive, these businesses are facing significant challenges.

• Difficulty securing loans for expansion
• Reduced working capital
• Increased risk of insolvency

Impact on Consumers

Consumers are also feeling the effects of the credit crunch. Mortgage rates are rising, making it more difficult to purchase homes. Credit card companies are tightening credit limits and increasing interest rates, putting pressure on household budgets.

Key Concerns

• Rising mortgage rates
• Increased credit card debt
• Reduced consumer spending

The deepening credit crunch is raising concerns about a potential recession. As businesses and consumers reduce spending, economic growth is likely to slow down. Governments and central banks are taking steps to address the crisis, but the outlook remains uncertain.