Nigerian banks credits to private sector hit N19.87 trln in Q3 ~NBS
By Oludare Mayowa
Nigerian banks granted a total of N19.87 trillion in credit to the private sector of the economy in the third quarter of 2020, with the highest going to the oil and gas sector of the economy, the National Bureau of Statistics (NBS) said in its latest report.
The data released by the statistics bureau showed that the oil and gas and manufacturing sector obtained N3.74 trillion and N3.03 trillion credits from the banking industry in the period.
“In terms of credit to the private sector, the total value of credit allocated by the bank stood at N19.87trn as of Q3 2020. Oil & Gas and Manufacturing sectors got credit allocation of N3.74trn and N3.03trn to record the highest credit allocation as at the period under review,” NBS stated in the report.
The report stated that credit by geographical distribution showed that Lagos State, being the commercial nerves centre of the country recorded the highest of N15.13 trillion credits, accounting for 77.74 percent of the total.
On the other hand, Yobe State recorded the least with N19.38 billion, accounting for 0.09 percent in the third quarter of the year.
The Central Bank of Nigeria (CBN) has in recent time said credit to the private sector of the economy has continued to grow due to the implementations of its Loan-to-Depot-Ratio (LDR) policy.
The regulatory bank had directed banks to lend 65 percent of their deposit as loans to the private sector of the economy in a bid to boost productivity and enhance the country’s economy.
However, a senior official of a manufacturing company said the increase in credit to the economy has not translated to higher productivity level due to dollar shortage and rising costs in the country.
According to the official, who declined to be named, the increase in naira credit to the private sector has not translated to growth due to the fact that many manufacturers could not access dollars to purchase raw materials and machinery for production.
The report stated that a total volume of 2,781,526,188 transactions valued at N319.99 trillion was recorded in the third quarter of 2020 as data on Electronic Payment Channels in the Nigeria Banking Sector revealed.
“As of Q3 2020, the total number of Deposit Money Banks’ staff increased by 1.47 percent quarter-on-quarter from 94,498 in Q2 2020 to 95,888.
Geographical Distribution of Credit by State stood at N19.46 trillion compared to N18.90trn in Q2 2020 and N16.62 trillion in Q3 2019. This represents 2.96 percent increase in credit Quarter on Quarter and 17.11 percent Year on Year.