Credit to Private Sector Adds N9.03trn in 3 Years, Reached All-time High in 2021

On the backdrop of the announced minimum Loan-to-Deposit Ratio of 60 per cent by the Central bank of Nigeria , credit to private sector between 2019 and 2021 appreciated by N9.03trillion, THISDAY can report.

The apex bank had reported N26.65trillion credit to private sector in 2019 and with the latest figure of N35.73trillion, it means credit to private sector has added N9.03 trillion in the last three years. The Deputy Governor, Financial System Stability, CBN, Aisha Ahmad, in her personal statement at the end of Monetary Policy Meeting of November 2021 noted that improvements in the macro economy was propelled by a resilient financial system which channelled significant credit to support growth enhancing sectors such as agriculture, manufacturing and general commerce, as well as individuals and households.

“There are reports of high default rates which have implications for the sustainability of such interventions. There are also concerns about the risk of lending to the targeted growth sectors of the economy. This often results in the reluctance of the deposit money banks to lend to those sectors as they are responsible for bearing the credit risks.

In addition, Analyst at PAC Holdings, Mr. Wole Adeyeye, said: “The LDR of 65 per cent played a significant role in the economic activities in the country as it encouraged higher loans from banks to the private sector. The lending helped most companies to meet the higher demand in 2021. Finance expert, Mr Rotimi Fakeyejo explained that excess liquidity in the “Ber” months contributed to growth in currency in circulation, stressing that Nigerians are finding it difficult to embrace the cashless policy of the CBN.

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