THE Central Bank of Nigeria has said that Deposit Money Banks intensified loan supply to households and firms in the second quarter of this year.
The apex bank said this became imperative as the coronavirus pandemic led to a dramatic surge in the demand for funds among Nigerian households and businesses.
It said the country witnessed an increase in the availability of both secured and unsecured loans.
The CBN revealed this in its Credit Condition Survey Report obtained by The Point on Tuesday.
The survey covers secured and unsecured lending to households, lending to Public Non-Financial Corporations, small businesses and Other Financial Corporations.
The apex bank noted that the availability of funds was a major driver for the demand for credit.
For secured credits, the CBN cited changing appetite for risk as the major factor for the increase in supply of the facility.
The CBN, in the report, noted that banks’ credit to the corporate sector also increased in the second quarter, following the demand for funds to restart their businesses amid the COVID-19 pandemic.
The apex bank had given palliatives to both households, individuals and firms, including corporate firms, to mitigate the negative impact of the pandemic.
The funds were also distributed by banks as participating institutions.
The apex bank noted that the demand for credit by corporate sector was expected to increase in the third quarter, owing to “changing sector specific risk.”
The request for secured lending for house purchase increased in the period under review, but the CBN expects demand for such lending to drop in the coming quarter.
“The proportion of secured loan applications approved decreased as lenders tightened the credit scoring criteria,” the apex bank said.
The demand for total unsecured lending from households increased in the second quarter, while a further rise is being projected in the third quarter.
