Rate of loans defaults by bank customers have declined as Non-Performing Loans (NPLs) ratio in the banking industry fell to 5.4 percent at the end of July, 2021, the Central Bank of Nigeria (CBN) said on Friday.
According to the regulatory bank, the NPLs ratio of banks fell by 0.3 percent in July from 5.7 percent in June.
However, the ratio of NPLs remain higher than the 5.0 percent prudential benchmark and the monetarists are urging the CBN to help bring down the present level.
In the communique read at the end of the Monetary Policy Committee (MPC) meeting, the CBN Governor, Godwin Emefiele said the monetarists welcomed the improvement in the NPLs ratio.
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“The Committee thus, urged the Bank to sustain current efforts to bring NPLs below the 5.0 per cent prudential benchmark,” Emefiele said.
Gross credit to the system, however, increased by N6.63 trillion in July to N22.20 trillion.
Credits to the economy rose from N15.57 trillion at the end of May 2021, according to the CBN data.
The regulator said the credit growth was largely recorded in manufacturing, oil and gas and agriculture sectors.
The CBN had in 2019 introduced the Loans-to-Deposit Ratio (LDR) in its bid to boost credit to the productive sector of the economy and help increase growth in the economy.