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Banks to tighten criteria on corporate loans – CBN

By Elizabeth Adegbesan

The Central Bank of Nigeria, CBN, has said banks will tighten criteria for corporate loans in the third quarter of the year.

CBN
Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele

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The apex bank said the criteria include more collateral, stronger loan covenants and higher fees/commissions for corporate loans.

CBN disclosed this in its Credit Condition Survey, CCS, report for the second quarter.

The report also indicated that though there was a decline in the availability of corporate loans  in the second quarter of the year, banks intend to reverse this trend in the third quarter.

The report stated: “The overall availability of credit to the corporate sector decreased in the second quarter, but was expected to increase in third.

“This was driven by favourable economic conditions, changing sector-specific risks, changing appetite for risk, market share objectives and changing liquidity positions.

“Lenders reported that the prevailing commercial property prices positively influenced credit availability of the commercial real estate sector in the current quarter.

“Lenders expect the prevailing commercial property prices to positively influence secured lending to public non-financial corpora-tions in the current quarter.”

 

 

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