The private sector has borrowed N5.16 trillion from banks between January and November 2021.
Also, credit to the government increased by 5 per cent to N13.03 trillion as of November 2021 from N12.4 trillion recorded as of the end of the previous year, further showing improved credit facility to the economy.
On a month-on-month basis, the private sector credit increased by N694.2 billion in November 2021, moving from N34.62 trillion recorded as of October 2021 to N35.3 trillion in the review period.
According to data from the Central Bank of Nigeria (CBN)’s money and credit statistics, bank credit to the private sector in Nigeria increased by 17per cent compared to N30.2trillion recorded as of December 2020.
Bank credit in Nigeria has skyrocketed in recent times, owing to a chain of CBN policies and increased activities in the Nigerian lending space, especially with fintech.
The Central Bank voted through the year to keep the benchmark monetary rate (MPR) at 11.5per cent, which determines the rate of acquiring loans from banks. A move, which was made to help stimulate real growth and recovery from the economic recession recorded in 2020 by improving credit to the real sector.
The apex bank pointed out during the monetary policy meeting in November that the stance to keep the rate has supported growth recovery and is poised to improve price stability that is conducive for sustainable growth.
The report from the CBN also shows that currency in circulation also rose by 8per cent in the review period to N3.15 trillion in November 2021 from N2.91 billion as of the end of the previous year.
Despite the increase in the amount of bank credit to the economy, lending rates remain on the high, with the maximum lending rate as of November 2021 rising to 27.26per cent compared to 27.1per cent recorded in the previous month.
Also, the saving deposit rate increased to its highest level in six months at 1.83per cent in November 2021 as against 1.28per cent recorded in the previous month. As of the review month, one month, three months, six months, and twelve months rates were 3.72per cent, 4.96per cent, 5.36per cent, and 7.34per cent respectively.
The increase in the rates and credit supply implies that Nigerian corporations are still open to more borrowings despite the high lending rates.
The central bank has held unto its monetary stance to boost credit by holding the MPR rate at 11.5per cent to spur growth in the economy and ensure the stability of prices in the country, having endured a significant surge in inflation rate in 2020 through to 2021.
In its final monetary policy committee meeting for the year in November 2021, the CBN highlighted that its policy had started to yield positive results given the improvement in Nigeria’s GDP (+4.03per cent in Q3 2021) and moderation in the inflation rate (15.4per cent in November 2021).
