Economic activities upsurge: Banks in Nigeria expect more loan request in 3rd quarter

Features & Reports

 

NIGERIAN BANKS are anticipating increased lending and borrowing activities in the third quarter of the year, driven by expected upsurge in economic activities during the quarter.

This was one of the highlights of the second quarter Credit Condition Survey report of the Central Bank of Nigeria (CBN) released last week. The report among other things revealed that, optimism that the nation is firmly on the path to positive economic growth translated to increase in demand and supply for loans, as well as improvement in loan default by households and businesses in the second quarter.

The report stated: “The availability of secured credit to households increased in Q2, 2017 and was expected to increase in the next quarter. Brighter economic outlook remained a major factor behind the increase. Lenders reported that the availability of unsecured credit to households increased in Q2, 2017 and was expected to increase further in Q3, 2017. Lenders reported that a favorable economic outlook contributed to the increase in unsecured credit availability in Q2, 2017.

“The overall availability of credit to the corporate sector increased in Q2, 2017 and was expected to further increase in Q3, 2017.

The anticipation of a brighter economic outlook was a major factor contributing to increased credit availability in the corporate sector.

Demand for secured lending for house purchase increased in Q2, 2017 and was expected to increase further in the next quarter.

Lenders also expect increased demand across all firm sizes in the next quarter, except the large PNFCs and the OFCs. Following the wide spreads between bank rates on all firms’ size businesses and MPR, the proportion of loan applications approved for medium and large businesses decreased in Q2, 2017.”

—-Vanguard