Determined to bolster the private sector, Nigerian commercial banks have increased lending by about N30 trillion, according to a new report.
Data from the Central Bank of Nigeria (CBN) shows that credit to the private sector (CPS) rose by 65.9% or N29.52 trillion to N74.31 trillion in May 2024, compared to N44.79 trillion in the previous year.
The CPS includes loans, trade credits, and other account receivables provided by banks to the private sector. This growth reflects the strong balance sheets of the banks.
A month-on-month analysis indicated sustained growth in lending, with extra credits of N1.39 trillion in May and N1.71 trillion in April 2024.
Lending rose from N71.21 trillion in March 2024 to N72.92 trillion in April and N74.31 trillion in May, showing increases of 1.9% and 2.4% for May and April, respectively.
This increase comes amidst a recapitalization move by the CBN Governor, Dr. Olayemi Cardoso, aimed at strengthening banks to drive the administration’s $1 trillion national economic target.
Financial analyst Boniface Okezie noted the resilience of Nigerian banks in the current macroeconomic environment, calling for government support.
Arthur Steven Asset Management’s Managing Director, Mr. Olatunde Amolegbe, attributed the increase in credit to heightened economic activity, though he cautioned that factors like inflation and devaluation could moderate such growth.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprises (CPPE), emphasized that growth should benefit sectors like agriculture, manufacturing, real estate, mining, and construction to have a broader impact on the masses.
He also highlighted the importance of considering inflation’s impact on the real value of credit growth and its distribution among various private sector segments.
(Daily Trust)