The Central Bank of Nigeria, CBN, has revealed that private sectors in the country borrowed not less than N5.1 trillion from commercial banks in the year 2021.
The apex bank in its Money and Credit statistics published on its official website noted that total credit to the private sector now stands at N36.7 trillion.
On a year-on-year basis, credit to the private sector rose by N5.6 trillion, from N30.1tn recorded in December 2020 to N35.7 trillion in December 2021.
According to CBN data, total loans to the private sector grew from N30.6tn in the first month of 2021 to end the year N35.7tn by December representing a 16.67 per cent increase.
Except for February, the CBN’s drive to ensure commercial banks offer more loans to companies was evident throughout the year.
From January N30.6 trillion private sector loans it increased to N30.5 trillion indicating a drop of N100 billion.
Lending picked to N31.4tn in March, further to N31.9tn in April, N32.1tn in May, and N32.6tn in June.
The climb continued in July as credit to the sector rose to N32.8tn. It increased to N33.4tn in August, N34.39tn in September, N35.3tn in October and N35.7tn in November.
Naija News reports that the CBN had earlier encouraged and ensured more loans are given to private sectors to boost productivity in the country.
In June 2019, CBN introduced a new policy measure, which required Deposit Money Banks to maintain a minimum of 60 per cent Loan to Deposit Ratio. The objective according to the apex bank is to grow the economy by making credit available to the real sector of the economy.
The Nigerian banking sector had toward the last quarter of the year 2021 recorded the most credit growth of the real sector of the economy in almost five years, hitting N17.1tn in the fourth quarter of 2019.
To further spur growth in the economy, the CBN in October 2019 raised the LDR of banks to 65 per cent, after the September 30 deadline given to the banks to meet the 60 per cent LDR directive.