OVER 1 MILLION PEOPLE TOOK LOANS FROM BANKS BELOW 20% INTEREST RATE IN 1 YEAR- CBN

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CBN said over one million banks’ customers took loans from their financial institutions in the last one year below 20% interest rate.

CBN, Aishah Ahmad, financial inclusion gender gap
Aisha Ahmad

The Central Bank of Nigeria (CBN) has stated that over one million bank customers took loans from their financial institutions in the last one year below 20% interest rate.

This was disclosed by the Deputy Governor, Financial Systems Stability, CBN, Mrs Aisha Ahmad, in her statement at the last Monetary Policy Committee meeting.

According to her, the development was an improvement from what was obtainable since July 2019.

Ahmad said,

  • “The gradual decline reported in lending rates is a positive development that improves access to credit for more households and businesses with a view to stimulating economic activity, creating jobs and driving a more sustainable and inclusive growth. As at October 2020, 86.23% of total loans granted to over one million customers by Deposit Money Banks were at interest rates considerably below 20%; an improvement from 76.43% as at July 2019.”

Banks should be vigilant

Ahmad tasked financial institutions to maintain vigilance in order to ensure optimal liquidity levels to support price stability and sustainable economic growth.

She said the banking industry’s financial soundness indicators strengthened with non-performing loans ratio declining to 5.7% at end-October 2020, from 6.1% (end-August 2020), while capital adequacy improved to 15.5% from 15.3% over the same period.

According to her, profitability performance also remained satisfactory, buoyed by improvement in non-interest income.

  • “Financial sustainability of banks would be paramount as moratoriums on restructured loans lapse in the near term to strengthen absorptive capacity for any potential losses and maintain lending support to the real economy.”

What you should know

  • Report indicated last week when the CBN stated that the gross credit to the Nigerian economy grew by N290.13 billion in about 6 weeks, between the end of August 2020 and November 13, 2020.
  • A total gross credit growth of N3.976 trillion was also recorded, as it grew from N15.567 trillion at the end of May 2019 to N19.544 trillion as at November 13, 2020.

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