Bank loans to the Federal Government reached N13.03 trillion in September, the Central Bank of Nigeria (CBN) has revealed.
In the latest credit and money statistics report obtained by Ripples Nigeria on Saturday, the apex bank said the figure was N307billion or 2.93 percent higher than N12.6 trillion reported in August.
The banking sector credit to the private sector increased month-on-month (M-o-M) by N425.9 billion from N33.4 trillion in August to N33.84 trillion in September.
The credit to the private sector stood at N30.65 trillion as of January, indicating that banks had borrowed businesses N3.19 trillion in the last nine months.
The increase in credit to the government and the private sector, therefore, has pushed the total amount given out by financial institutions to N46.87 trillion from N46.07 trillion reported in August.
The rise in credit from financial institutions was rightly attributed to the introduction of the 65 percent Loans-to-Deposit Ratio (LDR) in 2019.
The CBN had in a recent note warned banks that failed to meet the minimum LDR within a specified date would be levied an additional Cash Reserve Requirement equal to 60 percent of the lending shortfall of the target LDR.
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