Banks credit to private sector hit its highest level in December 2021, reaching N35.73 trillion from N30.15 trillion recorded as of December 2020, representing a N5.58 trillion increase in one year. This is according to data obtained from the Central bank of Nigeria.
The private sector wasn’t the only one benefiting from increased access to funds.hence,credit to government also increased by N1.33 trillion in 2021, rising to N13.73 trillion as of December 2021 from N12.4 trillion recorded as of the previous year.
The growth in credit to both private and government parastatal could be attributed to the Central Bank’s policies to stimulate the economy. Also, innovation in technology and the surge in the number of FinTechs in the lending space has brought more competition to the lending space.
The increase in bank credit is in line with the CBN’s mandate to give the real sector easy access to credit in order to ensure economic stability having suffered from a recession in the previous year during the covid-19 pandemic.
According to data acquired from the Central Bank of Nigeria, the Nigerian banking sector’s loan to the private sector increased by N5.1 trillion (16.67 percent) between January and December 2021.
A thorough examination of the monthly credit value reveals a steady rise throughout the year, with the exception of February, when credit to the sector fell by N100 billion. The figure dipped to N30.5tn in February, down from N30.6tn in January.
Bank loans to the private sector, on the other hand, increased to N31.4 trillion in March, then to N31.9 trillion in April, N32.1 trillion in May, and N32.6 trillion in June.
Credit to the sector increased to N32.8 trillion in July, continuing the upward trend. In August, it reached N33.4 trillion, followed by N34.39 trillion in September, N35.3 trillion in October, and N35.7 trillion in November.
Currency in circulation in Nigeria rose by N1.15 trillion in 2021 to N3.33 trillion as of December 2021 its highest level on record.
The apex bank maintained the country’s benchmark interest rate (MPR) at 11.5% all through 2021 and has started the new year with the same approach, retaining the cash reserve ratio at 27.5% and liquidity ratio at 30%.