Nigeria’s Deposit Money Banks’ credit to the private sector rose by 2.56 percent to N20.37 trillion in the fourth quarter (Q4) of 2020, the year that was bedevilled by the impact of Covid-19 pandemic.
The National Bureau of Statistics (NBS) on Monday released the banking sector report, which shows that total value of credit allocated by the bank stood at N20.37trn as of Q4 2020. Oil & Gas and Manufacturing sectors got credit allocation of N3.93trn and N3.19trn to record the highest credit allocation as at the period under review.
The reason for growth in banks’ loan book was as a result of the implementation of the Loan to Deposit Ratio (LDR) policy of the Central Bank of Nigeria (CBN).
Reacting to the development, Akintunde Olusegun, analyst at Polaris Bank Limited, said one major driver of the banking sector credit growth was the CBN’s push for banks to increase lending to the real sector of the economy.
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He said the CBN played its own part through various intervention funds available and accessible to banks to lend to their customers.
The CBN in October 2019 raised the Loan to Deposit Ratio of banks to 65 per cent, after the September 30, 2019 deadline given to the banks to meet its 60 per cent directive. However, the regulator extended the deadline of the 65 percent LDR to March 31, 2020.
Aisha Ahmad, deputy governor, said in her personal statement at the January 2020 Monetary Policy Committee (MPC) meeting that the LDR policy retained its efficacy, stimulating substantial increases in private sector loans, lowering market lending rates and has progressively diversified industry credit portfolio.
On the e-payment space, a total volume of 3,464,811,083 transactions valued at N356.47trn was recorded in Q4 2020 as data on Electronic Payment Channels in the Nigeria Banking Sector revealed.
The NBS report also shows that as of Q4 2020, the total number of banks’ staff decreased by -0.90 percent quarter-on-quarter (QoQ) from 95,888 in Q3 2020 to 95,026.
