✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters
Click Here To Listen To Trust Radio Live

Business loans increased in Q4, may go higher — CBN

A survey by the Central Bank of Nigeria (CBN) has indicated that there is an increase

A survey by the Central Bank of Nigeria (CBN) has indicated that there is an increase in the availability of loans to all firm sizes in the fourth quarter (Q4) of 2020.

The survey which was conducted in December 2020 was based on lenders’ own responses and not a reflection of the bank’s views on credit conditions in the economy.

The survey stated that there is an overall availability of credit to the corporate sector, which increased in Q4 2020 and is to go higher in Q1 2021.

The availability of unsecured credit provided to households increased in Q4 2020 and is expected to increase in Q1, 2021.

It maintained that the new status was driven by changing sector-specific risks, market share objectives, changing appetite for risk, changing economic conditions, and changing liquidity conditions.

While the availability of credit increased for all business sizes in Q4 2020, the trend is expected in Q1 2021.

The survey said more collateral requirements were demanded on the approved new loan applications in Q4 and lenders expect to demand higher collateral in Q1 2021.

However, demand for corporate lending decreased except for small businesses and Other Financial Corporation (OFCs).

The survey further reported that lenders saw an increase in the availability of secured credit to households in Q4 2020 relative to the previous quarter.

The proportion of loan applications approved in Q4 2020 decreased as lenders tightened their credit-scoring criteria.

Lenders expect to further tighten the credit-scoring criteria as they pre-empt the proportion of approved households’ loan applications to increase in Q1 2021.

VERIFIED: It is now possible to live in Nigeria and earn salary in US Dollars with premium domains, you can earn as much as $12,000 (₦18 Million).
Click here to start.