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7 out of 10 bank loans given to Lagosians 

77% of banking loans went to Lagos State Beneficiaries.



7 out of 10 bank loans given to Lagosians 

The latest data from the National Bureau of Statistics reveals Lagos state borrowers obtained 77.7% of all banking sector loans by value given to states across the country.

Lagos State is the commercial capital in the country and has dominated economic activities in the country since independence. 

READ: VAT collection surges on increased VAT rate

According to the data about N15.1 trillion out of N19.4 trillion of the loans went to Lagos State in the third quarter of 2020 a 13.86% rise from the same period in 2019. Total loans given to beneficiaries in Lagos State was N13.9 trillion at the end of 2019.  

READ: Effects of the recession on families and how to cope

7 out of 10 bank loans given to Lagosians 

Quarterly Geographical Distribution of Credit Beneficiaries by State (N’bn) 2015 to 2020

READ: FCMB Group posts N48.3 billion revenue in Q3 2020

What the data says

About 32 states in the country got less than 1% of the loans and a combined 12.01% of the loans buttressing just how concentrated Lagos is when it comes to banking.

  • Among the states with the least loans were Yobe, Jigawa, and Ebonyi States with 0.1%, 0.13%, and 0.13% respectively.  
  • Combined, businesses in 32 states borrowed N2.3 trillion compared to Lagos State alone with N13.9 trillion.
  • River State was next to Lagos with just 5% of the loan or N977 billion.

READ: Dapo Abiodun presents N339 billion budget to Ogun State Assembly

What this means: Lagos State remains the economic powerhouse of the country driving much of economic activities in the country. Apart from being the location for most head offices in the country it also maintains the most workforce employing about 11% of the total of 35.5 million employed people in the country.  

  • The central bank has made credit to the private sector the center point of its monetary policy. It has also focussed on its developmental responsibilities, particularly as it relates to Agriculture.
  • However, most of the states where farming is practiced received the least loans suggesting Nigerian banks are wary about lending outside of the commercial capital of Lagos.
  • For most small businesses outside of Lagos or the bigger cities in the country, the chances of obtaining a loan are slim and nearly non-existent.

READ: #EndSARS: Access Bank announces N50 billion interest-free facility for businesses

READ: Application and payment for C of O, building plans to be done online from Q1 2021




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    Financial Services

    Ratings agency, Moody’s reveals it is reviewing First Bank’s ratings

    Moody’s explained why it might downgrade First Bank’s ratings.



    Moody’s Ratings agency said on Thursday that it has put First Bank of Nigeria on review for a downgrade after the central bank sacked the board of directors and replaced them with new directors.

    Moody’s made this statement in a report titled ‘Removal of Non-Executive Board Members Highlights Governance Shortcomings.’

    In a quote, Moody’s said:

    “Moody’s Investors Service, (“Moody’s”) has today placed all long-term ratings and assessments of First Bank of Nigeria Limited (First Bank) on review for downgrade. The review will focus primarily on an assessment of evolving governance considerations at First Bank, specifically corporate governance developments. The rating action follows the dissolution of First Bank’s board by the Central Bank of Nigeria (CBN), the bank’s primary regulator, on 29 April 2021. As a result of this action by the CBN, all the non-executive directors were removed while the executive management remained in place.”

    The Governor of the Central Bank of Nigeria, Godwin Emefiele, had last week announced the sack of the entire board of directors of FBN Holdings Plc and its subsidiary, First Bank of Nigeria Ltd following the initial removal of its MD/CEO Dr Sola Adeduntan. Following his sacking of the board, he set up a new board for the bank holding company and its subsidiary and also reinstated Adeduntan as MD/CEO.

    Moody’s mentioned that the regulatory actions demanded of First Bank by the CBN introduces a clould of uncertainty over the outlook of the bank. For example, the CBN had asked the bank to divest from its holdings in two listed companies while also recovering its loans from one of them.

    “The review for possible downgrade reflects the rating agency’s view that the removal of all non-executive directors of the bank’s board by the regulator demonstrates corporate governance shortcomings and weaknesses in board oversight. The bank also needs to implement regulatory directives concerning the resolutions of loans to, and shareholding in non-banking related parties, which reportedly had not been executed in the recent past.

    Moody’s notes that the outcomes of these developments are uncertain at this point, and the final and long-term governance, reputational and financial implications of the events for First Bank are also unclear.”

    The central bank directive sacking the board of the bank also retained its executive management perhaps suggesting that the CBN had confidence in the ability of the MD and his team to manage the bank. Moody’s also noted this in its briefing.

    “While the bank’s executive management team remained the same, the rating agency believes these developments could distract management’s focus on implementing the bank’s strategic plan and road to recovery. First Bank management’s immediate key target was to reduce nonperforming loans (NPLs) to levels comparable with domestic peers. The rating agency recognises that, in the context of asset risks, the bank took steps to reduce its stock of problem loans, with its reported NPL ratio falling to 7.7% at year-end 2020 from 25.9% in 2018.”

    Will Moody’s downgrade First Bank?

    The rating agency explained that the decision to downgrade will depend on how strong the bank’s corporate governance structure is and whether the CBN will impose additional sanctions. If any of these crystallizes, it could downgrade its ratings.

    “The bank’s long-term deposit ratings can be downgraded if flaws in the bank’s governance systems exist, and if the CBN imposes additional sanctions on the bank, including, but not limited to, conditions to address any vulnerabilities that may be discovered. Financial output that is less than anticipated could also result in a rating downgrade.”

    Moody’s, however, poured water on any optimism around a rating upgrade.

    Given the review for downgrade and the pessimistic outlook on the government of Nigeria, there is a slim chance that First Bank’s ratings will be upgraded. Stronger solvency progress than currently reflected in the ratings, combined with a stabilization of the sovereign outlook, could result in the outlook being stabilized.

    Why is rating important?

    Corporate Organizations desire positive ratings because of the effect it has on their ability to raise capital as well as the cost of capital. A high credit rating typically attracts positive investor sentiments helping organizations tap the debt and equity markets, especially from institutional investors.

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    Insurance companies paid N4 billion in claims after EndSARS protests – NIA

    The NIA chief assured that some insurance operators were still working to settle genuine claims as most claims from insured businesses had been paid.



    The Nigerian Insurers Association (NIA) says Insurance companies paid N4 billion in claims to over 2000 businesses affected by the aftermath of the EndSARS protest after hoodlums took to the streets.

    This was disclosed by Mr Ganiyu Musa, Chairman, NIA, on Thursday in Lagos.

    The NIA chief assured that some Insurances operators were still working to settle genuine claims as most claims from insured businesses had been paid.

    READ: Marginal oilfield: Bid winners allowed to make payments in naira – Minister

    “The number of insured businesses that were affected at the last count was about 2,000 insured loss and the industry has settled N4 billion claims out of N4.5 billion in respect of the #EndSARS protests.

    Once they are documented and completed, we have the commitment of our members that the claims will be paid timely,” he said.

    He added that the association would continue ensuring members pay genuine claims to clients.

    What you should know

    Recall Speaker of the House of Representatives, Femi Gbajabiamila disclosed that Lagos State will need about N1 trillion for the reconstruction and repair of the properties and infrastructure that was vandalized and destroyed by hoodlums.

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