Bank loan

Bank lending to the private sector jumped N5.58 trillion in 2021

Bank credit to the private sector peaked in December 2021, reaching N35.73 trillion from N30.15 trillion recorded in December 2020, an increase of N5.58 trillion in one year.

This is according to data obtained from the Central Bank of Nigeria.

The private sector was not the only one to benefit from increased access to funds, therefore, credit to government also increased by 1.33 trillion naira in 2021 to 13.73 trillion naira in December 2021 , compared to 12.4 trillion naira recorded the previous year. .

The growth in credit to private and public parastatals could be attributed to Central Bank policies aimed at stimulating the economy. Additionally, technological innovation and the increase in the number of FinTechs in the lending space have increased the competition in the lending space.

The increase in bank credit is in line with the CBN’s mandate to give the real sector easy access to credit to ensure economic stability that suffered from a recession the previous year during the covid-19 pandemic.

Report Highlight

  • According to data acquired from the Central Bank of Nigeria, Nigerian banking sector lending to the private sector increased by N5.1 trillion (16.67%) between January and December 2021.
  • A closer look at the monthly value of credit reveals a steady increase throughout the year, with the exception of February when credit to the sector fell by 100 billion naira. The figure fell to 30.5 trillion naira in February from 30.6 trillion naira in January.
  • Bank lending to the private sector, on the other hand, increased to N31.4 trillion in March, then N31.9 trillion in April, N32.1 trillion in May and N32.6 trillion in June.
  • Credit to the sector increased to N32.8 trillion in July, continuing the upward trend. In August, it reached 33.4 trillion naira, followed by 34.39 trillion naira in September, 35.3 trillion naira in October and 35.7 trillion naira in November.
  • Currency in circulation in Nigeria increased by 1.15 trillion naira in 2021 to reach 3.33 trillion naira in December 2021, its highest level on record.
  • The apex bank kept the country’s benchmark interest rate (MPR) at 11.5% throughout 2021 and entered the new year with the same approach, keeping the cash reserve ratio at 27.5. % and the liquidity ratio at 30%.