The Central Bank of Nigeria has said that Nigeria’s credit to the private sector grew to N33.8 trillion as of September 2021.
According to the credit statistics obtained from the apex bank, the country’s private sector has witnessed a rise in borrowing in recent years, due to a combination of central bank’s monetary policies, innovation in technology and credit profiling as well as a surge in FinTech companies participating in the lending space.
However, in August 2021, credit to the private sector had risen to an all-time high of N32.6 trillion only for the economy to take on an additional N1.2 trillion in new net borrowing in three months.
This year alone, the private sector has recorded a net increase of N3.69 trillion in net borrowings. Over the last 5 years, credit to the private sector has risen by over 100 per cent growing from N18.7 trillion in December 2015 and nearly doubling to N32.6 trillion in 2021.
Credit to government has also increased to N13 trillion, the highest since the central bank started collating data in 1960. Nigeria is now in one of its highest-ever credit growth phases amassing a total net domestic credit of N46.8 trillion or 28.5 per cent of GDP.
At the last Monetary Policy Committee meeting of the Central Bank held in September, it noted the effect of the growth in credit on stimulating the economy, encouraging banks to continue to channel credit to the real sector.
“The Committee noted the improvement in lending to the real sector following the introduction of the Loans-to-Deposit Ratio in 2019.
Industry gross credit increased by N6.63 trillion from N15.57 trillion at the end-May, 2019 to N22.20 trillion at the end-July, 2021. The credit growth was largely recorded in manufacturing, oil and gas and agriculture sectors,” they said.