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Availability of unsecured credit to households dips in Q3 2020 – CBN

The report presents the results of the Q3 2020 surveys conducted by the Statistics Department of the Central Bank of Nigeria.

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Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN , To test FX market, CBN pumps $50 million, CBN issues guidelines to Finance Institutions on establishment of Subsidiaries and SPVs, CBN injects $2.63 billion to defend naira in one month, CBN’s COVID-19 N50 billion targeted credit facility, CBN’s heterodox policies buoys credit growth, These industries drove business activities in September, Credit to Nigerian economy falls to N38.67 trillion as private stagnates at N30 trillion, Availability of secured credit to businesses and households increases as unsecured credit to households dips in Q3 2020 - CBN

The credit conditions survey report for households, small businesses, and corporate entities for Q3 2020 released by the Central Bank of Nigeria, showed that there was an increased availability of credits for both secured and corporate entities, while the unsecured credits to households witnessed a decline.

This was contained in the Q3 credit condition survey report, released by the Central Bank of Nigeria (CBN).

The major highlights of the survey report are as follows:

  • There was an increase in the availability of secured credit to households in Q3 2020 compared to Q2 2020, as a result of improved liquidity conditions for most lenders, as well as their drive to increase their respective market shares and dominate in the market space.
  • According to the survey report, such trajectory is expected to be replicated in Q4 2020 – considering that Q4 2020 marks the financial year-end for most lenders, as they strive to end the year with robust gross loan portfolio size.
  • With the expected increase in the availability of loanable funds as well the improving economic outlook in Q4 2020, the availability of unsecured credits to households is expected to increase in Q4 2020, though it dipped in Q3 2020.

(READ MORE: CBN lists major constraints affecting businesses, as borrowing rates projected to rise)

  • The proportion of approved total loan applications for households decreased as a result of the lenders tightening their credit scoring criterion for unsecured loan applications in Q3 2020. With poor quality assets already in the books of most of the lenders, the lenders may have no choice but to further tighten the existing credit scoring criteria in Q4 2020.
  • It is expected that the overall availability of credits to the corporate sector would further increase in Q4 2020 as a result of changing sector-specific risks, changing economic conditions, changing appetite for risk, market share objectives, and changing liquidity conditions of the lenders.
  • The lenders reported that while spreads on credit card lending and unsecured approved overdrafts/personal loans widened, the spread and overall unsecured lending narrowed in Q3 2020. This is quite understandable as the unsecured lending carries so much risk and as a result, the lenders could charge at a premium rate to make more spreads. It is, however, the expectations of the lenders that the spread of unsecured approved credit card lending and overall unsecured lending would further widen, while secured overdrafts/personal loans lending will narrow in Q4
  • Adequate collateral requirements were demanded from all firm sizes on all approved new loan applications in Q3 2020 and there would not be any significant changes, as lenders would expect to demand even higher collateral requirements from all firm sizes in Q4 2020.

(READ MORE: CBN receives order to freeze bank accounts of 20 #EndSARS sponsors)

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What you should know

The Central Bank of Nigeria, on a quarterly basis, conducts surveys across all the lenders to understand trends and developments in credit conditions.

The report presents the results of the Q3 2020 surveys conducted by the Statistics Department of the Central Bank of Nigeria and the trends and developments in credit conditions in the third quarter (Q3 2020) and the expectations in the fourth quarter of 2020 (Q4).

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The survey covers secured and unsecured lending to households, lending to Public Non-Financial Corporations (PNFCs), small businesses, and Other Financial Corporations (OFCs).

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FIRS to commence recovery of all outstanding tax debts and penalties from January 1, 2021

The FIRS has stated that it shall recover all outstanding debt with penalties and interest from January 1, 2021.

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FG apologizes, says Self-Certification directive is not for everyone, FIRS introduces stamp duty on house rent and C of O transactions

The Federal Inland Revenue Service (FIRS) has disclosed that its waivers on penalties and interest on outstanding taxes arising from desk examinations, audit exercises, investigations, or all other forms of tax assessment will close on December 31, 2020.

Hence, effective from January 1, 2021 the Service shall recover all outstanding debt with penalties and interest, in accordance with the provisions of the extant tax laws.

This disclosure was made by Abdullahi Ismaila Ahmad, the Director of Communications and Liaison Department, Federal Inland Revenue Service, in a press release issued on December 2, 2020.

Consequently, the Executive Chairman, FIRS, Mr. Muhammad Nami, in a notice urged taxpayers to use the advantage of the remaining days of this month to settle their tax obligations in order to enjoy all subsisting waivers offered thereof by the Service.

(READ MORE: FIRS issues deadline for to obtain Tax Identification Number)

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The Executive Chairman in the reminder notice tagged “Public Notice on the Recovery of Outstanding Taxes from Taxpayers”, disclosed that FIRS in recent times, has issued a series of palliatives for the waivers of penalties and interest on outstanding taxes.

He explained that the Service had noticed that some taxpayers are yet to take advantage of the palliative windows opened to cushion the effect of the challenges of the economy on taxpayers.

Mr. Nami, however, called the attention of taxpayers to the last window of opportunity for the waiver of outstanding penalties and interest on all taxes collectible by the Federal Inland Revenue Service, which will close on 31st December 2020.

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What they are saying

Mr. Muhammad Nami, in the reminder notice, said:

“The Service has observed that some taxpayers are yet to take advantage of the palliative windows opened to cushion the effect of the challenges of the economy on taxpayers.

“Furthermore, the Service wishes to put all taxpayers on notice that the last window of opportunity for the waiver of outstanding penalties and interest on all taxes collectible by the Federal Inland Revenue Service shall close on 31st December 2020.

“Consequently, all concerned taxpayers are hereby put on notice that after the expiration date of 31st December 2020, the Service shall recover all outstanding debt with penalties and interest, in accordance with the provisions of the extant tax laws such as ‘the power of substitution’ conferred on it by Section 31 of the Federal Inland Revenue Service (Establishment) Act 2007.”

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N117 billion approved by FG for road rehabilitation

Babatunde Fashola has disclosed that the FG has approved the sum of over N117 billion for road rehabilitation across the country.

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Second Niger Bridge will be completed in 2022, project, Minister of Power works and housing Babatunde Fashola, Shell Nigeria Exploration and Production Company, SNEPCo Bayo Ojulari, Power supply in Nigeria

The Federal Government has approved the sum of over N117 billion for the rehabilitation of roads across the country in 2021.

This was disclosed by Babatunde Fashola, Minister of Works and Housing, in a press briefing after the Federal Executive Council (FEC) meeting was held in Abuja on Wednesday.

What you should know 

  • Nairametrics reported last month that Mr Fashola had stated that the Ministry’s priority in its 2021 budget was to complete already ongoing road and bridge projects across the nation.
  • Fashola also said that the Federal Government needed at least N500 billion annually for the next 3 years to develop and fix its 35,000 kilometres road network, as work continued on 13,000 kilometres of the network.
  • Fashola stated last month that the Federal Government was committed to finishing the Lagos-Ibadan expressway, adding that the drop in crude oil prices could not be a barrier to its completion.

Fashola disclosed on Wednesday that the sum of N18.9 billion, was approved for the rehabilitation of roads and bridges including the 26 km of Kano-Dambatta-Kazaure-Daura road, Anambra- Enugu Roads, Bridge construction Cross River, Nkumi bridge and others.

The other memorandum relating to roads also is for the total sum of N98.7 billion,” he added. This includes roads and bridges in Zamfara, Kebbi, Katsina, Anambra and Kano

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$1.3 billion Malabu oil field sale was perfect – Dan Etete

Nigeria’s former Petroleum Minister has said that the sale of the $1.3 billion Malabu oil field to Shell and Eni in 2021 was legally perfect.

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FG seizes Dan Etete’s luxury private jet linked to Malabu oil deal

Dan Etete, former Nigerian Minister of Petroleum has said that the $1.3 billion sales of Malabu oil field to Shell and Eni in 2021 was legally perfect, with zero traces of corruption in the deal.

He disclosed this on Wednesday through his lawyer, Antonio Secci, in a Milan Court, investigating the cases of bribery and corruption related to the deal, as reported by Reuters.

READ: Why Nigeria is suing Royal Dutch Shell and ENI for $1.1bn

In Wednesday’s hearing, Dan Etete’s lawyers called for the former Nigerian Minister to be acquitted of corruption charges related to the deal.

Reuters disclosed that 13 other people are involved in the corruption case including CEO of Eni, Claudio Descalzi.

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READ: Court adjourns trial of Shell, Eni officials over bribery allegation in Nigeria

The accused pleaded non-guilty and said that the proceeds of the deal were paid into accounts owned by the Nigerian Government.

The ex-Shell executives also accused in the case will have a hearing on the 9th of December.

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READ: P&ID dispute: $200 million guarantee to FG judgment shows FG’s commitment to tackle corruption-  Malami

What you should know 

Multinational oil companies, Eni and Shell, paid $1.3 billion in 2011 to acquire OPL 245 offshore field.

The payment was to a company called Malabu, which was owned by Nigeria’s former Oil Minister, Dan Etete.

However, Italian prosecutors claim that most of the payments were kickbacks to Nigerian government officials. Italian prosecutors also claim that nearly $1.1 billion was stolen by Nigerian politicians and middlemen, with Dan Etete keeping half.

READ: $85 Million Malabu oil money has been refunded to FG

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Nigeria’s Minister of Justice, Justice Abubakar Malami, reported in July that the Dutch and Swiss governments were expected to send the sum of $200 million from the OPL 245 Malabu Oil deal to Nigeria.

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Multinational Petroleum oil and gas giant, Royal Dutch Shell, announced that it would write down its investment in the controversial Malabu OPL 245 offshore field in Nigeria.

READ: Italian Court jails Nigerian, one other over Malabu oil deal

in June, the Federal Government tracked down and grounded a luxury private jet, owned by the country’s former Petroleum Minister, Dan Etete, over his alleged involvement in the $1.1 billion Malabu oil scam. The luxury private jet was alleged to have been purchased with proceeds from that oil deal.

Nairametrics reported that the Federal Government, on Wednesday, September 9, 2020, asked a court in Milan to order Royal Dutch Shell and Eni to pay the sum of $1.092 billion as an immediate advance payment for damages in the Malabu oil scandal.

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