Determined to bolster the private sector described as the engine room of the economy, Nigerian commercial banks have raised lending by about N30 trillion, a new report has revealed.
According to data from the Central Bank of Nigeria (CBN), credit to the private sector (CPS) rose by 65.9 per cent or N29.52 trillion to N74.31 trillion in May 2024 compared with N44.79 trillion recorded in the previous year 2023.
The CPS includes loans, trade credits and other account receivables and supports provided by banks to the private sector within a period.
The growth in lending rates was seen largely as a reflection of the strong balance sheet of the banks.
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Further analysis of the report on a month-on-month basis indicated sustained growth in lending over the past two months following a record of extra credits of N1.39 trillion and N1.71 trillion in May and April 2024 respectively.
Banks’ lending and supports to the private sector rose from N71.21 trillion in March 2024 to N72.92 trillion in April and topped N74.31 trillion in May 2024, representing a month-on-month increase of 1.9 per cent and 2.4 per cent for May and April 2024 respectively.
This is coming amidst the ongoing recapitalization move which the CBN Governor, Dr. Olayemi Cardoso, insisted would strengthen the banks to drive the $1 trillion national economic target of the present administration.
In a chat with our correspondent, a financial analyst, Boniface Okezie said Nigerian banks have demonstrated resilience within the context of the current macroeconomic environment.
Despite the present economic challenges, he stated that banks have stood high and sustained the economy. Therefore, he called on the government to support the banks.
Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe, said the increase in credit to the private sector could be attributable to increase in economic activity.
He however noted that other factors such as inflation and devaluation could moderate such increase.
Also speaking, Chief Executive Office, Centre for the Promotion of Private Enterprises (CPPE), Dr. Muda Yusuf said the growth should reflect more in sectors like agriculture, manufacturing, real estate, mining, construction etc that would impact more on the masses.
“What one million could buy a year ago, will require between N1.5 to N2m to buy today. This is why we should be cautious in celebrating growth in nominal numbers. The second issue is the distribution of the credit among the various segments of the private sector.
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