Nigerian banks extended 5.1 trillion naira in credit to private sector players in 2021, with total credit to the private sector now standing at 36.7 trillion naira, reports IgbereTV.
The figure is in line with the latest money and credit statistics from the Central Bank of Nigeria (CBN) published on its website.
On an annual basis, credit to the private sector increased by 5.6 trillion naira, from 30.1 trillion naira recorded in December 2020 to 35.7 trillion naira in December 2021.
According to CBN data, total lending to the private sector increased from 30.6 billion naira in the first month of 2021 to 35.7 billion naira at the end of the year in December, representing an increase of 16.67%.
With the exception of February, the CBN’s drive to ensure that commercial banks provide more business loans was evident throughout the year.
From January, private sector lending of 30.6 trillion naira fell to 30.5 trillion naira, indicating a decline of 100 naira.
Loans reached 31.4 tn in March, then 31.9 tn in April, 32.1 tn in May and 32.6 tn in June.
The rise continued in July as credit to the sector rose to N32.8 billion. It rose to 33.4 tn in August, 34.39 tn in September, 35.3 tn in October and 35.7 tn in November.
The CBN has made serious efforts to ensure that more loans are granted to the private sector.
In June 2019, the CBN introduced a new policy measure, which required depository banks to maintain a loan-to-deposit ratio of at least 60%.
The objective was to grow the economy by making credit available to the real sector of the economy.
At the end of the last quarter of that year, the Nigerian banking sector recorded the strongest real sector credit growth in the economy in almost five years, reaching N17.1 billion in the fourth quarter of 2019.
To further stimulate the growth of the economy, the CBN in October 2019 raised the LDR for banks to 65%, after the September 30 deadline given to banks to meet the 60% LDR guideline.