- Banks Raise Commission, Collateral Requirements for Corporate Loans
Commercial banks in the country now demand more collateral from all firm sizes on approved new loan application in the first quarter (Q1) 2018, a report has stated.
Also, the report indicated that lenders will demand for more collateral from all firm sizes in the next quarter.
In the same vein, fees/commissions on approved new loan applications rose for all firm sized businesses in Q1 2018 and has been estimated to remain high in the next quarters.
The Central Bank of Nigeria (CBN) disclosed this in its Credit Conditions Survey Report posted on its website at the weekend.
According to the report, all firms did not benefit from an increase in maximum credit lines on approved new loan applications in Q1 2018, except for small businesses.
Similarly, all firm sizes expected not to benefit from an increase in maximum credit lines on approved new loan applications in Q2 2018, except for large PNFCs.
“Demand for corporate lending from all business sizes increased in the current quarter and were also expected to increase in the next quarter. Demand for overdrafts/personal loans in Q1 2018 was higher in comparison with other loan types.
“The most significant factors that influenced demand for lending in the review quarter were the increase in inventory finance and capital investment, and they were expected to remain the main drivers in the next quarter,” it added.
Furthermore, the report showed that corporate loan performance as measured by the default rates improved for all sized business in the review quarter.
Lenders also expect lower default rates on lending to all sized businesses in the next quarter.
In addition, the average credit quality on newly arranged PNFCs borrowing facilities improved for both quarters.
Loan tenors on new corporate loans improved in Q1 2018 and were expected to improve further in the next quarter.
But draw down on committed lines by PNFCs worsened in the current quarter and was expected to improve in the next quarter.
In the same vein, households demand for lending for house purchase decreased in Q1 2018, but was expected to increase in the next quarter.
Of the total demand, households demand for prime lending and other lending increased, and these demands were expected to increase in the next quarter.
“Households demand for consumer loans rose in the current quarter and is expected to rise in the next quarter.
Demand for mortgage/re-mortgaging from households rose in Q1 2018 and is expected to rise in Q2 2018.
“Secured loan performance, as measured by default rates, worsened in Q1 2018 but is expected to improve in Q2 2018.
“Similarly, loss given default worsened in the current quarter and it is expected to improve in the next quarter,” it stated.
The availability of unsecured credit provided to households rose in the current quarter and was expected to rise in the next quarter. Lenders reported brighter economic outlook and higher appetite for risk as the major factors that contributed to the increase in Q1 2018, the report showed.
Despite lenders’ resolve to tighten the credit scoring criteria for total unsecured loan applications in the review quarter, it showed that the proportion of approved total loan applications for households increased.
Also, lenders expect to still tighten the credit scoring criteria in the next quarter, but anticipated that the total loans applications to be approved in Q2 2018 will increase.
The proportion of approved credit card loans decreased in Q1 2018 due to lenders’ stance on the credit scoring criteria for granting credit card loans. Similarly, the proportion of approved overdraft/personal loans applications decreased.
Lenders reported that spreads on credit card lending widened in Q1 2018 but were expected to narrow in the next quarter. Spreads on unsecured approved overdrafts/personal loans applications narrowed in the current quarter and was expected to further narrow in the next quarter. Overall spreads on unsecured lending narrowed in the current quarter and was expected to be same in the next quarter.
The limit on unsecured credit cards on approved new loan applications decreased in Q1 2018 but was expected to increase in the next quarter.
The minimum proportion of credit card balances to be paid on approved new loan applications increased in the review quarter and was expected to further increase in the next quarter.
“Maximum maturities on approved unsecured new loan applications were shortened in the current quarter, and lenders anticipated that they will remain shortened in the next quarter.
“Demand for unsecured credit card lending from households increased in Q1 2018 but was expected to decrease in Q2 2018. However, demand for unsecured overdraft/personal loans from households increased in Q1 2018 and was expected to increase in Q2 2018.
“Lenders experienced higher default rates on credit card and overdrafts/personal lending to households in the current quarter. They however, expect improvement in default rates in the next quarter,” it added.
Air Passengers Drop as Domestic Airlines Resume Operations
Number of Air Passengers Drop as Domestic Airlines Resume Operations
The number of air passengers dropped despite Governor Babajide Sanwo-Olu lifting the curfew imposed to address looting and destruction of properties in the state.
The busiest airport in the country, Murtala Mohammed Airport, resumed full operations on Monday, however, passengers are cautious about flying, especially because of the tense situation across the nation.
Some of the officials of the Federal Airports Authority of Nigeria as well as those of domestic airlines confirmed that domestic passenger volume had been on a slow start since they commenced full operations.
Okwudili Ezenwa, the spokesperson for Dana Air, said “We are hoping that by next week, everything should have settled down because right now, people are still trying to be sure of their movements.
“Passengers are being cautious before they come out. So, things have not balanced. People are not leaving Lagos as such from the airport now; rather, they are being careful.”
He added, “In locations where no curfew was announced, other places will still have to feed such locations. So since we have curfews here and there, ultimately it affects areas where we don’t have curfew.
“But we hope everything settles down well before next week.”
Similarly, Stanley Olisa, the spokesperson, Air Peace, explained that even though domestic flight operations had resumed, passengers were still wary of flying.
“Yes domestic flights have resumed out of the Lagos airport but it is something that is only picking up gradually,” he said.
333,000 Artisans: FG Commences One-Time Payment of N30,000
FG Begins One-Time Payment of N30,000 to 333,000 Artisans
The Federal Government on Monday said it has commenced a one-time payment of N30,000 to 333,000 artisans under the Micro Small and Medium Enterprises (MSMEs) Survival Fund.
In a statement issued by Laolu Akande, the Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, disbursements were being done to verified beneficiaries of the Artisan Support Scheme.
The statement read in part, “In the first stream of payments starting today, beneficiaries are being drawn from the FCT, Lagos, Ondo, Kaduna, Borno, Kano, Bauchi, Anambra, Abia, Rivers, Plateau and Delta States. They form the first batch of applications for the scheme submitted between October 1 and October 10.
“The MSMEs Survival Fund scheme is a component of the Nigerian Economic Sustainability Plan, NESP, which was developed by an Economic Sustainability Committee established by President Muhammadu Buhari in March 2020.
“The President asked his deputy, Vice President Yemi Osinbajo, SAN, to head the committee which produced and is overseeing the implementation of the plan. “Under the ESP, the Survival Fund is generally designed to among other things, support vulnerable MSMEs in meeting their different obligations and safeguard jobs in the sector.”
Absorb Exited Npower Beneficiaries, N-power Youths Congress Tells FG
Absorb Npower Beneficiaries of Batches A and B, N-power Youths Congress Tells FG
The N-power Youths Congress (NYC) has pleaded with the Federal Government to absorb the 500,000 exited Npower beneficiaries of Batches A and B and pay their outstanding allowances.
The National Coordinator, NYC, Comrade Joseph Enam Maga, stated this in Maiduguri during a press briefing held on Saturday at the NUJ Press Center.
He said thousands of exited beneficiaries are yet to be paid since the month of Match.
He, therefore, called on the Federal Government to offset all the outstanding allowances of Batches A and B and create a permanent job for them.
He said “It is a fact undisputable that thousands of beneficiaries have not been paid since the month of March.
“Promises upon promises have been made on this, but yet no positive result has been recorded. Sometimes I wonder what it takes for the data base manager of Npower to rectify this! Something that can be rectified in a couple of hours has lasted for seven good months now.
“Worst still, this is happening within this period of hunger and starvation because of Pandemic. We call on the minister of humanitarian affairs and disaster management to be human enough to respond to our request and give prompt attention to them.
“We equally wish to bring to the notice of Mr. President that Batch B Beneficiaries have not received their devices as was promised and signed at the commencement of the program.
“It is very sad that up to the disengagement of Batch A and B, nobody has come out openly to tell us what happened to our devices.
The coordinator paused to ask why are Nigerian youths being treated like nobody in their country? What have we done to be neglected like this?
“When the Humanitarian Minister was asked why we were disengaged at this critical time in historical epoch that corona virus is terrorizing the whole world, she responded that we were disengaged because it’s a two years programe that we signed.
“Then comes the question: why did Batch A stayed 4years? And if we signed for two years contract that warranted our disengagement, didn’t we equally signed to be given a device that would help us in our different places of primary assignment and equally increase of knowledge? Please we need answers ma. We need answers.
“We, the 500,000 batches A and B of Npower beneficiaries are calling on our government to respond to our demand. We don’t want to believe that it’s only a state of violence anarchy and doom will make a sane government to listen to her Youth’s grievances.
“Look at the Endsars protest for instance, after many lives have been lost and properties destroyed, our government decided to speak up. Niger delta militants were attended to when they resort to arms.
“The insurgents were given amnesty because of their terrorism. But we the innocent 500,000 graduates have been innocently complaining to our government but they paid deaf ears. We are law abiding citizens and we will continue to be law abiding citizens.
“We want Mr. President to understand that a hungry man is an angry man. We have really endured a lot. We need a quick response to our requests. We can’t be used and dumped like refuse. We refused to be used and dumped”, the National Coordinator added.
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