The FBNQUEST capital research has revealed that there its need for improvement in credit extension in 2018 as the recently released data by the Nigerian Bureau of Statics (NBS) , on capital inflow has revealed.
According to the analyst, due to the low credit advanced by the deposit money banks in the fourth quarter 2017, compared to the 3rd quarter, there is need or growth in capital inflow to the real sector , economic drivers,.
It added that , the agriculture sector, which is at the forefront of the economic diversification initiative of the government, received just 3.4 per cent in Q4 2017, and as such, the sector will continue to struggle until agriculturists can gain better access to credit. However, we note the multiple interventions by the CBN.
It noted “the NBS has recently released a report for Q4 2017, entitled Selected banking sector data, drawn from the CBN. This report shows that banking sector credit to the private sector totaled N15.7trn in Q4 2017, compared with N15.8trn recorded in the previous quarter.
The oil and gas sector was the largest recipient of loans from DMBs, accounting for 23% of total credit to the private sector. We understand that some banks are seeing demand for loans for additional working capital requirements to boost oil production.
The second largest recipient of loans was the manufacturing sector, which accounted for 14% of the total in the same period, unchanged from the previous quarter.
the report further stated that
outlook for Nigeria’s economy is now relatively stable as some uptick in growth is expected on the back of an increased fiscal stimulus, and a pick-up in oil prices and production as well as selective private sector investments.
“So far the deposit money banks (DMBs) have maintained a cautious approach towards lending to the private sector so as to avoid a surge in non-performing loans””
Stories by Bonny Amadi