CEM REPORT, FINANCE | The Nigerian Private Sector received loans up to ₦43 trillion from financial institutions in the first quarter of 2023 (Q1’23).
This represents a ₦1.3 trillion increase in the net loans extended to the sector despite the central bank’s policies aimed at reducing the amount of cash in circulation.
This is according to data from the Central Bank of Nigeria (CBN).
The CBN in its bit to reduce inflation raised interest rates in the last 5 monetary policy meetings.
However, despite the consistent increase the private sector is willing to collect more loans.
The data suggest that despite the dwindling economy Nigerian lenders are willing to take the risk of investing in the nation’s economy.
Although, while it is important to control inflation and reduce cash circulation, the need for sufficient credit, available to both the private sector and the government to support economic growth and development cannot be over-emphasized.
In contrast, total credit to the government fell slightly from ₦28.4 trillion to ₦27.5 trillion. This is also the second-largest drop in credit to the private sector since 2020.
Credit to the private sector includes consumer loans, small business loans, commercial loans, structured finance, trade finance, mortgages, and all sorts of other loans issued to businesses and individuals.