Financial returns are falling for businesses, but not for households

Let's take a closer look at the surprising reality behind the government-driven rate cut. While businesses enjoy an immediate benefit, families continue to pay high rates on their personal loans.

According to the data, returns in the financial system fell sharply from 35% in January to around 20% in July. This decline is significant and marks a major shift in the way companies access capital.

However, what is surprising is that the cost of business loans has plummeted to 25.6%, while that of personal loans has barely fallen to 64.8%. This suggests that businesses are taking greater advantage of the rate cuts than households are.

Household delinquency has reached an alarming 12.8%, which partly explains why the low interest rate has had little impact on their personal loans. This high delinquency rate is a clear indicator that households continue to face difficulties in paying off their debts.

For investors, this scenario offers an important lesson: lower interest rates may benefit businesses, but not always households. It is essential to take this context into account when assessing the risks and opportunities in the financial market.