Banks’ Loan To Nigeria’s Private Sector Rises To N36.37 Trillion

Bank credit to the Nigerian private sector, according to a report by the Central Bank of Nigeria (CBN), rose to N36.37 trillion as of March 2022, representing N1.18 trillion net new loans to the real sector in the first quarter of the year.

The report read that Nigeria’s credit to the private sector increased by 3.3% from N35.19 trillion recorded as of December 2021, to stand at N36.37 trillion.

Also, credit to the government also increased by N2.99 trillion in the review period to stand at N16.32 trillion as of March 2022, while currency in circulation declined slightly by N79.56 billion in Q1 2022.

The apex bank has encouraged the Nigerian banking sector to continue injecting funds into the real sector of the economy in a bid to stimulate growth and ensure recovery from the recession witnessed during the covid-19 lockdown in 2020.

Meanwhile, despite the increased credit, loans-to-deposit ratio of deposit money banks dropped to 58.81% in March 2022 as against the 59.12% recorded as of December 2021.

This implied how liquid the Nigerian economy has been in recent times with customer deposits also surging beyond bank credit. Notably, the CBN highlighted that liquidity ratio remained above its prudential limit at 43.5% in February 2022, with the Capital Adequacy Ratio (CAR) moderating slightly to 14.4% in the same month.

Also, the non-performing loans (NPL) ratio of Nigerian banks has been on a downtrend despite increased credit. Specifically, NPL ratio dropped slightly to 4.84% in February 2022 from 4.9% recorded in December 2021, according to the apex bank.