By Adaeze Okechukwu
THE Central Bank of Nigeria, CBN, has disclosed that the availability of credit to the corporate and households sectors increased during the third quarter (Q3) of 2017, while projecting further increase in the last quarter of the year (Q4).
Though the apex bank did not give figures on bank credits during the period in a survey report titled, “Credit Conditions Survey Report”, it said that the Q3‘17 credit condition survey of households, small businesses and corporate entities indicated increases in the availability of secured, unsecured and corporate credit. It also said that spreads on overall secured and corporate lending to household widened during the period.
The report stated: “Lenders reported that household demand for total unsecured lending increased in the current quarter, and was also expected to increase in the next quarter.
Availability of credit
“Demand for corporate lending increased across all firm sizes in the review quarter, except demand for credit card from small businesses and lending from other financial corporation’s (OFCs).”
CBN noted that some of the factors that drove the overall increase in the availability of credit to the corporate sector were brighter economic outlook, changing sector specific risk, increased appetite for risk, tight wholesale funding conditions and favourable liquidity conditions.
The survey further stated: “Lenders reported that the prevailing commercial property prices negatively influenced credit availability of the commercial real estate sector in the current and next quarters. Similarly, lenders expect the prevailing commercial property prices to positively influence secured lending to Public Non-Financial Corporations (NPFCs) in the current quarter.
“Furthermore, demand for corporate lending from small businesses, medium and large PNFCs increased in the current quarter, and were also expected to increase in the next quarter. Demand for overdrafts/personal loans in Q3 2017 was higher in comparison with other loan types. The most significant factors that influenced demand for lending in the review quarter were the increase in inventory finance and capital investment, and they were expected to remain the main drivers in the next quarter.”
Concerning the household sector, the report revealed that lenders reported an increase in the availability of secured credit to households.
The lenders also noted that the availability of secured credit was also expected to increase in the next quarter with favourable liquidity positions as a major contributory factor.