As of June 2022, Nigerian banks had lent N26.8 trillion to the private sector, the most ever. According to preliminary data from the Central Bank of Nigeria, this is the case.
Commercial banks, also known as deposit money banks, lent a total of N26.8 trillion to the private sector as of June 2022, an increase from N24.378 trillion as of December 2021, or a 10.15 percent growth in just six months.
As of June 2021, deposit money banks were lending N21.89 trillion to the private sector, growing their loans by N5 trillion in a single year.
Over the past five years, Nigeria’s central bank has aggressively pursued a strategy of lending to the private sector in the hopes that this will help accelerate economic growth in the real economy and generate jobs.
As of December 2015, there were only N15.7 trillion in loans to the private sector, meaning that N11 trillion had been added in fewer than 7 years.
Further analysis of the data reveals that the Manufacturing sector now leads the pack as the industry with the highest percentage of loans for the first time. The entire amount of loans made to the manufacturing sector came to N4.53 trillion, or 16.9% of the total.
The Manufacturers Association of Nigeria laments that despite an increase in loans to the industry, increased interest rates, inflation rates, and access to foreign exchange are obstacles impeding sector growth.
Recently, Mr. Mansur Ahmed, President of MAN, emphasized the importance of collaboration between both sectors in order to combat poverty, draw in investment, and foster economic progress.
The growth of the industry, the bank, and the economy as a whole is no longer supported by the old industry-bank loan relationship, he claimed. Industry activity has drastically decreased, resulting in an increase in the number of dying industries nationwide and capital flight. Considering this knowledge, the commercial banks and the sector must collaborate to develop new methods of generating funds.
