Credit to the Private Sector (CPS) slumped from N75,834,241.09 in September to 73,947,418.84 in October, representing about three per cent decline in one month.
Data by the Central Bank of Nigeria (CBN) indicated that the CPS has oscillated between N73 trillion and N74 trillion in the quarter of 2024.
The credit to the private sector represents the financial resources provided to the private sector by financial institutions such as through loans, purchases of non-equity securities, and trade credits and other accounts receivable, that establish a claim for repayment.
Though the credit to the private sector has seen a significant growth in 2024 compared to the previous year, the decline is said to be a response to the CBN’s tightening of fiscal policy in order to tame the rising inflation.
Year-on-year, the October 2024 credit to the private sector is still 15 per cent higher than the value recorded in 2023, which was N63.5 trillion.
The year 2024 has particularly been hailed by experts for the resilience of the country’s financial system and the confidence in the strength of the banking sector.
From N62.5 trillion in December last year, the year started with the banks pumping N76.4 trillion into the private sector in form of loans, purchases and trade credits and in February 2024, the credit rose by six per cent to N80.8 trillion.
For the following month, the CPS witnessed a sharp decline by N9.65 trillion to N71.2 trillion in March. It rose to N72.91 trillion in April; N74.31 trillion in May and N73.19 trillion in June.
The third quarter of 2024 saw credit to the private sector peaking to N75.50 trillion but dropped by about one trillion naira in August before crashing to N73.94 trillion in October to end the th wasird quarter.
Analysts say the decline could have been triggered by measures to contain inflation which have necessitated the increase in monetary policy rate (MPR) which currently stands at 27.5%.
Join Daily Trust WhatsApp Community For Quick Access To News and Happenings Around You.
