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Business News

CBN says bank credit grew by N290 billion in 6 weeks as lending rates drop

The CBN has disclosed that the gross credit to the economy grew by N290.13 billion in about 6 weeks.

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CBN, Aishah Ahmad, financial inclusion gender gap

The Central Bank of Nigeria (CBN) has disclosed that the gross credit to the Nigerian economy grew by N290.13 billion in about 6 weeks, between the end of August 2020 and November 13, 2020.

A total gross credit growth of N3.976 trillion was also recorded, as it grew from N15.567 trillion at the end of May 2019 to N19.544 trillion as at November 13, 2020.

READ: CBN grants approval for banks to debit accounts of loan defaulters 

This disclosure is contained in the personal statement of the Deputy Governor, Financial System, CBN, Aisha Ahmad, issued as part of the apex bank’s communique after the Monetary Policy Committee (MPC) held on November 23 and 24, 2020.

Ahmad said that sustaining critical support to the economy through this crisis remains a priority as credit growth remained on an upward trajectory with robust soundness indicators and sustained decline in average lending rates.

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READ: Analysis: GTB is minting profits but CBN is squeezing its cash.

She said much of this credit which was channeled to manufacturing, consumer, general commerce and agriculture – all key employment generating sectors, was largely driven by effective implementation of the Loan to Deposit Ratio (LDR), various government interventions and other complementary policies to ramp up credit to the economy.

The statement from the CBN Deputy Governor partly reads,

  • “For instance, gross credit grew by N290.13 billion between end of August 2020 and November 13, 2020; while total gross credit growth of N3,976.34 billion was recorded from N15,567.66 billion at end of May 2019 to N19,544.00 billion at November 13, 2020. Much of this credit was channeled to manufacturing, consumer, general commerce and agriculture – all key employment generating sectors.
  • “This was broadly driven by effective implementation of the Loan to Deposit Ratio, interventions and other complementary policies to ramp up credit to the economy.’

READ: Ahead of CBN’s policy implementation, Fidelity Bank’s LDR hits 80% 

Ahmad noted that the gradual decline reported in lending rates is a positive development that improves access to credit for more households and businesses with a view to stimulating economic activity, creating jobs and driving more sustainable and inclusive growth.

She said that as at October 2020, 86.23% of total loans granted to over 1 million customers by deposit money banks were at interest rates considerably below 20%, an improvement of 76.43% that was achieved as at July 2019.

READ: CBN: Unconventional monetary policies needed to grow and diversify the economy  

Going further, she said that this low interest rate environment was also reflected in the Open Buy Back rate which stood at 1.88% at end of October 2020, an indication of a highly liquid banking system.

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READ: GTBank’s Segun Agbaje shares his thoughts on CBN’s loan policies

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What you should know

  • The CBN as part of measure to stimulate the economy has introduced several policies to boost credit to Nigerian businesses. Some of these policies include the increase of LDR to 65%, the various intervention programmes targeted at Micro, Small and Medium Enterprises (SMEs) at low interest rates and so on.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Anonymous

    December 26, 2020 at 8:24 pm

    Thanks for this update

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Corporate Press Releases

FITC wins BIZZ, IBX Global Awards for Business Excellence, Strategic Leadership

FITC was announced the winner of the two global awards in an elaborate virtual ceremony held in Doha, Qatar and Houston Texas respectively.

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Financial Institutions Training Centre (FITC)

FITC, the world-class, innovation-led, technology-driven, knowledge and professional services institute has emerged winner of the 2020 Business Excellence Award (The BIZZ Awards) and the Strategy, Change, and Transformation Award (The IBX Awards).

FITC, which provides cutting edge Learning, Advisory and Research Services to organizations within the Financial Services and other sectors, was announced winner of the two global awards in an elaborate virtual ceremony held in Doha, Qatar and Houston Texas respectively.

The Nigeria’s premier knowledge institute, FITC, won the Gold category in The BIZZ awards and Silver category in Strategy, Change and Transformation in the International Business Excellence, IBX Awards in recognition of its phenomenal initiatives that have led to innovative and exceptional transformation within the organization.

Also presented with an award was the Managing Director and CEO, FITC, Chizor Malize, who won the IBX 2020 Award for “Inspirational Leader”. The award was in recognition of the innovative, dynamic and game changing work at FITC in 2020 at the height of the global pandemic resulting in the extraordinary organization wide transformation at FITC and positive impact on the Nigerian financial services sector, FITC’s primary focus area.

Other IBX 2020 Award winners include Microsoft and Virgin Mobile.

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The International Business Excellence (IBX) Awards is part of a global business movement, giving organizations the chance to meet and compete with others from all over the world. Over the last twelve years, IBX Awards have been leading the way in recognising inspirational business practices, holding over 100 events and hosting more than 2000 companies.

Organized by Awards International, the IBX Awards recognises long-term sustainable profitability achieved through the practice of excellence, which occurs across a broad range of disciplines and defines the modern business agenda.

The BIZZ Awards gathers and recognizes leading businesses from different regions that contribute to the daily growth of their local economy and the world economy. THE BIZZ was created by World Confederation of Businesses (WORLDCOB), to offer to the global business community a range of benefits that further their development.

WORLDCOB was founded in 2004 in Houston, Texas, in the United States of America. Its primary mission is to promote business development worldwide, recognizing and boosting the growth of leading businesses and businesspeople in every country through the special tools and services that it offers its members. The organization has approximately 3,500 members representing over 130 countries.

Considered to be the most important business excellence award in the world, The BIZZ Awards is organized and given out to the most outstanding companies and businesspeople in each participating country. The award which targets small, medium and large enterprises was created to recognize businesses with practices worthy of recognition who end up being examples for other businesses to follow in their communities and internationally.

Speaking on the awards, Malize, said the organization would keep going beyond the ordinary in its effort to delivering innovative knowledge solutions to its clients in the Financial Services and other sectors.

“For 40 years, FITC has been an innovator, enabling people and organizations to excel and it was in line with our vision to build a world class innovation-led and technology-driven organization that we defined our six success pillars which are programmes, process, platforms, people, positioning and performance.

“We took deliberate and strategic steps by making significant changes across these key drivers of the positive transformation experienced today by our stakeholders, and which has also culminated to these awards and recognitions being given to our organization today. We are extremely delighted by these awards and we remain committed to helping our clients in the Financial Services and other sectors navigate and advance their careers, while building on our member firms’ successes through our clear vision, strong corporate values, and our culture of excellence,” Malize said.

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Established in 1981 as a non-profit organisation limited by guarantee to provide capacity building and serve as a knowledge hub for the Nigerian Financial Services Sector, FITC is owned by the Bankers Committee, Central Bank of Nigeria, Nigeria Deposit Insurance Corporation (NDIC) and all deposit money banks in Nigeria.

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Over the years, FITC has demonstrated delivery of best-in-class services using a large pool of multidisciplinary and versatile professionals, who provide business support to its numerous clients within the public and private sectors, most notably within the financial services sectors and public sector of Nigeria and Sub-Saharan Africa.

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Debt Securities

Ecobank Nigeria secures N50 billion 10-Year subordinated loan

Ecobank Nigeria has secured a N50 billion, 10-year bilateral subordinated loan.

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Ecobank Nigeria

Ecobank Nigeria, a subsidiary of Ecobank Transnational Incorporated (‘’ETI’’) has announced that it has secured a N50 billion, 10-year bilateral subordinated loan.

This is according to a disclosure signed by the Group Head, Adenike Laoye and sent to the Nigerian Stock Exchange, as seen by Nairametrics.

The bilateral funding will enable the bank to maintain stable liquidity and improve its balance sheet, especially the capital adequacy ratio by an estimated circa 300 basis points.

What they are saying

The disclosure from the bank read thus:

“Ecobank Transnational Incorporated (“ETI”), the parent of the Ecobank Group, announces that one of its significant subsidiaries, Ecobank Nigeria, secured N50 billion, 10-Year bilateral subordinated loan.

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“The bilateral funding provides stable medium-term liquidity to the balance sheet of Ecobank Nigeria and positively improved its balance sheet ratios, especially the capital adequacy ratio by circa 300 basis points. The transaction proceeds would be deployed to support Micro, Small and Medium Scale Enterprises (“MSMEs”) and Small Corporates.”

What you should know

Ecobank Transnational Inc. had earlier recorded 11% rise in its interest income to N139.6 billion for Q3 2020, as captured by Nairametrics.

  • Subordinated loans have lower priority than other debt instruments in case of liquidation. They are only repayable after other debts have been paid.
  • This debt can either be secured or unsecured and it typically has a lower credit rating and higher yield than other senior debt.

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Coronavirus

Covid-19: 70% of doctors in Nigeria are infected – NARD

NARD has claimed that the majority of its members are infected with Covid-19.

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COVID-19: Nigeria, 6 other African countries to start antibodies tests next week

The National Association of Resident Doctors (NARD) has claimed that majority of its members are infected with Covid-19.

This is according to Dr Adejo Arome, NARD’s First Vice President while speaking during an interview with Channels Television on Sunday.

Arome said that almost 70% of its members in “clinical practice” are infected with Covid-19. He also lamented that “almost all the doctors in the UCH Pediatrics Department, Lafia in Nasarawa State, had been infected with COVID-19.”

Dr Arome noted that he had been personally exposed to COVID-19 but could not be tested due to lack of access to a testing facility.

READ: Covid-19: Second wave more catastrophic, we lost 20 doctors in one week – NMA

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He also complained that some hospitals do not only lack hand gloves, they give one face mask to each of their doctors to use for two days.

The association noted that lack of Personal Protective Equipment (PPE) for its members and non-disclosure of true symptoms of sickness by people seeking treatment is contributing to this infection rate.

NARD is, thus, appealing to the government to come up with policies that would make it unlawful for patients to hide their medical conditions.

READ: Over 700 NYSC Batch B members test positive for COVID-19 – PTF

What they are saying

Arome, speaking on Channels TV, illustrated the challenges facing doctors in this pandemic era. He said:

“I must tell you that the morale among we doctors is very low at this point in time. It is so disheartening that the number of health workers being infected with Covid-19 is increasing daily – and it seems nothing is being done to reduce this number.

I heard that almost all the doctors in certain health facilities, including the UCH are infected. It is like that every day and I believe that every doctor in clinical practice should have been exposed to Covid-19.

Apart from PPE, people are not being truthful. They go to one hospital the doctor there tells them this is what I’m suspecting and when they are told what is wrong, they run away praying and thinking that they will get a different diagnosis elsewhere.

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READ: Nigeria records 1,964 new cases of Covid-19, highest daily surge

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“I think it is high time the Federal Government stepped up and brought out policies that will make it unlawful for patients and their relatives to come to the hospital and lie to doctors because by so doing, they are currently exposing us and our families.

“In a pandemic, every patient coming into your consulting room is suspected to have COVID-19 until proven otherwise. But the truth is when we don’t have everything that we need to work with, you don’t expect the doctor that is treating the patients not to examine them.

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READ: Covid-19: FG to buy Oxford/AstraZeneca vaccine

“You will go to some hospitals and they will give a doctor one face mask for two days. You don’t even have gloves. You keep on writing prescriptions for patients to buy gloves and you as a doctor will feel bad because some people don’t even have food to eat, so why should you be writing them prescriptions to be buying gloves?

“Once one of us gets exposed, that person ends up exposing more than 4,000 patients because the doctor-patient ratio in this country is one to about 4,000 patients.”

READ: Covid-19: Sanwo-Olu discloses how Lagos intends to fund vaccination programme

What you should know

The weekly epidemiological report of COVID-19 situation by the NCDC shows that:

  • Lagos has the highest number of covid-19 related deaths – 271 (18.9%).
  • Edo State recorded 127( 8.9%)  deaths out the  1,435 so far in the country.
  • The Federal Capital Territory (FCT) has  118 (8.2%)

According to Nairametrics Covid-19 tracker, as of Sunday 24th January 2021

  • The total number of cases stood at 121,566.
  • The total number of death stood at 1,497.
  • The total number of tests conducted stood at 1,258,534.

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