Nigerian Banks are anticipating greater demand for loans in the third quarter (Q3) of 2017, as the economy continues to recover from a lengthy period of recession.
Nigeria, often regarded as the “Giant of Africa”, owing to its large population and economy has endured an extended period of economic timidity, owing to unfavourable currency policies that saw inflation more than double to almost 20percent, foreign investment dry up, and left manufacturing at a near standstill. A significant number of small businesses also folded up as the country was ushered into a protracted period of economic recession.
But things are easing up as inflation has maintained a steady decline since the turn of the year. The Central Bank of Nigeria (CBN) has also relaxed its tight currency policies and manufacturing is beginning to see marginal, but positive month-on-moth growth figures.
This has created renewed optimism not only for manufacturers and big businesses but smaller enterprises that have recently reopened for business.
Banks expect this progress to linger on through Q3 and Q4. Their prediction is premised on the growing demand for loans from households and corporates. Just in May last month, Banks began to offer loans in USD again after the CBN committed to sustaining the supply of foreign exchange to the local market.
The prediction from Banks was captured in the second quarter Credit Condition Survey Report of the CBN. In the report, Banks confirmed that lending in the second quarter to both households and corporates grew significantly.
“The availability of secured credit to households increased in Q2, 2017 and was expected to increase in the next quarter. Brighter economic outlook remained a major factor behind the increase,” the report confirmed. Lenders further confirmed an increased demand for corporate credit across all firm sizes in Q2.