Banks’ credit to the economy expands by N3.77tn in 15 months – CBN

“The bank’s policy on Loan to Deposit ratio also resulted in a significant growth in credit to various sectors from N15.57 trillion to N19.33 trillion between end-May 2019 and end-August 2020, an increase of N3.77 trillion,” CBN chief, Godwin Emefiele told journalists on Tuesday at the announcement of the bank’s Monetary Policy Committee decisions in Abuja.

“This growth in credit was mainly to manufacturing (N866.27bn), consumer credit (N527.65bn), oil and gas (N477.65bn), agriculture (N287.11bn) and construction (N270.97bn).”

Net domestic assets and net foreign assets also grew, encouraged by broad money supply, which climbed to 6.93% (year-to-date) in August from 5.23% in July 2020.

However, aggregate domestic credit growth rate slowed to 6.94% in August from 9.43% in July.

Read also: Banks’ credit to the economy dropped by N455bn in Q4 2018 —NBS

The regulator had disbursed credit worth N3.5 trillion since the pandemic outbreak, with the real sector taking the chunk of the lending at N216.87 billion, while the rest lending went to the COVID-19 Targeted Credit Facility, the Agri-Business/Small and Medium Enterprise Investment Scheme, the pharmaceutical and healthcare support fund and creative industry financing initiative at N73.69 billion, N54.66 billion, N44.47 billion and N2.93 billion respectively.

The real sector funding was committed to 87 projects: 53 in manufacturing, 21 in agriculture and 13 in services.

Health sector financing embraced 25 hospital and health care services projects as well as 16 pharmaceuticals adding up to 41.

“The Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) intervention has been extended to a total of 14,638 applicants, while 250 SME businesses, predominantly the youths, have benefited from the creative industry financing initiative,” Mr Emefiele said.

The CBN is on course to provide fund topping N1.8 trillion of the N2.3 trillion Nigerian Government’s Economic Sustainability Plan by way of interventions using the Participating Financial Institutions’ channels.