Unsecured Credit to Decline in Q1, 2020 -CBN

• Unsecured Credit to Decline in Q1, 2020 -CBN

The Central Bank of Nigeria on Monday said unsecured credit facility to households will decline in the first quarter of 2020, the statistics department of the apex bank stated.

This was despite the apex bank increasing Loan-to-Deposit ratio from 65 percent to 70 percent on the 1st, January 2020.

While banks were expected to increase credit facility to the private sector substantially in 2020, they were also expected to do so at a controlled risk level.

In the Credit Conditions Survey Report released by the apex bank for the fourth quarter of 2019, the bank said: “The availability of secured credit to households increased in Q4 2019 and was expected to increase in the next quarter.

It stated, “Improving liquidity positions was the major factor for the increase in secured credit.

“Lenders reported that the availability of unsecured credit to households increased in Q4 2019, but it is expected to fall in Q1 2020.

“Most lenders adduced market share objectives for this increase.”

Also, the apex bank projected that credit to corporate institutions will increase even further in the first quarter of 2020 following positive improvement achieved in the final quarter of 2019.

However, in spite of risk management measures put in place by the apex bank, application for unsecured credit grew from households in the final quarter of 2019 and expected to increase even more in 2020.