CBN’s Credit Drive: The compelling case vs our concern

Must Read

PepsiCo Elects Segun Agbaje To Board Of Director

PepsiCo, Inc. (NASDAQ: PEP) today announced its Board of Directors has elected Segun Agbaje as an independent member of...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

FG to shut Third Mainland Bridge on July 24 for 6 months

The Federal Government is set to shut the Third Mainland Bridge for six months starting from Friday, July 24. This...

Recently, reports emerged that the Central Bank of Nigeria (CBN) is planning to review Nigerian banks minimum Loan-to-Deposit Ratio (LDR) upward from the current 65.0% to 70.0% in 2020. This is amid the growth in banks credit to the private sector that trail(ed) the current (65.0%) and previous (60.0%) pronouncements. Notably, real sectors such as; Manufacturing, Commerce, ICT, Construction, Agriculture, and Mining & Quarrying sectors have been the biggest beneficiary of the renewed credit drive.

Making the CBN’s case more compelling, is the sustained moderation in Non-Performing Loans (NPLs), to its lowest since Nigeria entered recession in Q2-16. Notably, the Monetary Policy Committee (MPC), at its last meeting in 2019, attributed the improvement in NPLs to the CBN’s Global Standing Instruction (GSI) initiative which had addressed the predatory impact of serial borrowers in the banking system. Also, the improvement in the overall economic output recorded in Q3-19 (GDP: +2.28%) and the sustained expansion in manufacturing as well as non-manufacturing Purchasing Managers’ Index (PMI) over the period, typified some of the impacts of banks’ lending to the real economy.

CBN’s Credit Drive: The compelling case vs our concern

However, while we acknowledge the monetary authorities’ effort to boost real sector growth, we highlight the need for the fiscal authorities to complement these efforts by creating an enabling environment for businesses to thrive. Accordingly, we believe the CBN should delay increasing the LDR further, until when the fiscal authorities commit to implementing the needed reforms.

Read Also:  CBN Establish Monthly Target For MFB To Improve Financial Inclusion
- Advertisement -

United Capital Research

- Advertisement -
CBN’s Credit Drive: The compelling case vs our concernCBN’s Credit Drive: The compelling case vs our concern

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.


Please enter your comment!
Please enter your name here
Read Also:  Daily Insight: Dissecting the CBN’s Real Sector Support Facility (RSSF) Guidelines

This site uses Akismet to reduce spam. Learn how your comment data is processed.

CBN’s Credit Drive: The compelling case vs our concernCBN’s Credit Drive: The compelling case vs our concern

Latest News

PZ Cussons seeks shareholders’ approval for Nutricima sale to FrieslandCampina

PZ Cussons Nigeria Plc has advanced discussions on the sale of its food and drinks subsidiary, Nutricima Limited, to...

Glo cuts cost of international calls by up to 55%

Nigerian operator Globacom has cut international call tariffs by as much as 55 per cent. Globacom said the reduced tariffs come without any subscription...

COVID-19 Pandemic in H2-2020: Any vaccine in sight?

Since the novel Coronavirus became a pandemic, the focus of governments, the World Health Organization, and multilateral agencies, has been on the need to...

Hyundai Motor Unveils Rendering of New Elantra N Line

Hyundai Motor Company today released a design rendering of the new Elantra N Line sport sedan and revealed other details about the new performance-inspired...

OMO Bears Emerge As Annual AMCON Charge Further Squeezes System Liquidity

KEY INDICATORS FGN Bonds The FGN bonds market traded on a mixed sentiment today, slightly bullish at the short-end and bearish at the long-end of the...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -CBN’s Credit Drive: The compelling case vs our concernCBN’s Credit Drive: The compelling case vs our concern