Banks cut loans to govt by 73% in March

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Commercial lenders significantly reduced loans to the three tiers of government by 73.18% to N19.59 trillion in March 2024 from N33.93 trillion in the previous month, according to data from the Central Bank of Nigeria.

This decline in credit is attributed to the government’s increased participation in the fixed-income market through treasury bills and bonds, as observed by financial analysts.

In March, Professor Olusegun Ajibola, the former President of the Chartered Institute of Nigeria, noted that the government raised a significant amount of money from the fixed-income market. This decreased their reliance on loans from commercial lenders. Additionally, financial analyst and stockbroker Rotimi Fakayejo attributed the drop in credit to the public sector to the redemption of government securities during that period.

Banks also reduced lending to the public sector due to directives from the Central Bank of Nigeria. However, analysts anticipate improved lending to the government by banks as the year progresses, reflecting evolving trends in the financial sector.

Source: PUNCH

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