It is possible that these tighter credit conditions might push small businesses into failure and default on their loans. But any impact from this channel on the financial system at this stage is still quite small. Non-performing loans in the private unincorporated business sector have risen a bit over the past year or so but they remain at relatively low levels (Graph 9).
The same applies to importers as well when they are handicapped by incomplete pass-through of the increase in their input cost. The foreign currency borrower, who has to carry the exposure for a much longer period than the exporter or the importer, can find his cash flows and the bottom line seriously impaired because of depreciation of the home currency.