• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Economy Macros

Banks’ interest rates are high despite CBN’s LDR policy – Report

Samuel Oyekanmi by Samuel Oyekanmi
June 2, 2021
in Macros
Financial markets, CBN Forex Godwin Emefiele

The Central Bank of Nigeria Governor, Godwin Emefiele

Share on FacebookShare on TwitterShare on Linkedin

A recent empirical study has revealed that the Central Bank’s Loan-to-Deposit ratio policy did not lead to a drop in the lending rates offered by Nigerian commercial banks, despite the decline in the cost of funds to the banks.

This is contained in an exploratory study, titled “An appraisal of the CBN temporary credit initiative,” which was published on CBN’s website.

According to the study, while the cost of funds to banks was declining, the lending rate to customers was on the rise, a signal of exploitation by banks, which is in turn, affecting expected economic growth. Notably, short-term interest rates which were theoretically expected to hover within the MPR corridor were in most cases below the floor.

RelatedStories

CBN, forex

CBN says insurance concerns prompt decongestion of Abuja headquarters, clarifies early exit policy 

July 30, 2025
Gold

Boost N2.77 trillion gold reserves and explore crypto as asset diversification strategy, experts urge CBN  

July 23, 2025

Recall that the Central Bank increased the required minimum LDR to 60% in July 2019 and further reviewed it forward to 65% later in the year. The Apex bank noted a significant increase in the size of gross credit by Deposit Money Banks to customers, hence retained it at 65% in January 2020.

A cursory look at the credit report from the National Bureau of Statistics (NBS) shows that gross loans have grown by 32.28% from N15.48 trillion as of Q2 2019 to N2.48 trillion by the end of 2020. This indicates that commercial banks offered N4.99 trillion additional loans in less than two years.

The banks have also been able to reduce their NPL ratio from 9.33% to 6.2% in the same period. According to the study, as credit to customers expanded, the ratio of non-performing loans to total loans continuously moderated. This was attributed to various other policy measures that accompanied the credit boost strategy.

What this means

  • The study revealed that while the CBN adjusted the loan-to-deposit ratio to 65% and mandated DMBS to comply, the benefit of the policy has not been fully realised.
  • It submitted that the policy contributed to increasing lending to the economy but did not substantially bring about a reduction in the cost of funds.
  • This means that, despite increased access to credit, Nigerians are still paying as much interest rates to the commercial banks.

Follow us for Breaking News and Market Intelligence.
Tags: banksCBNcommercial banksDBMSinterest rateLDRMPR
Samuel Oyekanmi

Samuel Oyekanmi

For further inquiries about this article, contact: Email: samuel.oyekanmi@nairametrics.com Twitter: @OYEKANMISAMUEL Linkedln: Samuel Oyekanmi

Related Posts

CBN, forex
Financial Services

CBN says insurance concerns prompt decongestion of Abuja headquarters, clarifies early exit policy 

July 30, 2025
Gold
Cryptos

Boost N2.77 trillion gold reserves and explore crypto as asset diversification strategy, experts urge CBN  

July 23, 2025
CBN Governor Yemi Cardoso to be honoured at Nairametrics Capital Market Awards for monetary policy reforms and banking sector recapitalization 
Bank Recapitalization

8 Nigerian banks meet minimum forbearance related requirements – CBN Governor

July 22, 2025
CBN Governor Yemi Cardoso to be honoured at Nairametrics Capital Market Awards for monetary policy reforms and banking sector recapitalization 
Breaking News

CBN holds interest rates flat at 27.5% for 7 straight time

July 22, 2025
CBN Governor Yemi Cardoso to be honoured at Nairametrics Capital Market Awards for monetary policy reforms and banking sector recapitalization 
Economy

Liquidity surge from FAAC raises inflation concerns – Cardoso

July 20, 2025
CBN, forex
Economy

CBN flags spike in loan defaults, small businesses top defaulters in Q2 2025 

July 18, 2025
Next Post
Daymak to produce electric car that mines cryptocurrencies

Daymak to produce electric car that mines cryptocurrencies

Comments 1

  1. Luka Esther says:
    June 3, 2021 at 5:25 am

    Please help us to fight this problem and instead of two years they are making it 3years for us

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Palmpay

first bank








DUNS

Recent News

  • Fidelis Ayebae leaves role as MD/CEO of Fidson Healthcare, what’s next for the pharmaceutical company? 
  • Singapore to introduce No-Boarding Directives from 2026 to stop high-risk travellers before arrival 
  • Nigeria Immigration Service ends paper-based CERPAC applications for foreigners, moves online from August 1 

Follow us on social media:

Recent News

Fidelis Ayebae leaves role as MD/CEO of Fidson Healthcare, what’s next for the pharmaceutical company? 

Fidelis Ayebae leaves role as MD/CEO of Fidson Healthcare, what’s next for the pharmaceutical company? 

August 1, 2025
Top 10 Leading Countries in Foreign Investment into Nigeria

Singapore to introduce No-Boarding Directives from 2026 to stop high-risk travellers before arrival 

August 1, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics