CBN Reports 91% Performing Corporate Loans, Highlights Credit Growth Trends
Corporate Loans Remain Strong, Says CBN
The Central Bank of Nigeria (CBN) has reported that 91% of corporate loans remain performing, showcasing resilience in the country’s banking sector.
However, non-performing corporate loans (NPLs) have risen to 9%, surpassing the regulatory benchmark of 5%, according to the latest Credit Conditions Survey.
The report indicates fluctuations in loan default rates throughout 2024:
Q1: 4.5%
Q2: 2.8%
Q3: 6.2%
Q4: 9%
Despite this increase, the CBN reassured businesses and financial institutions of continued credit availability, with corporate loan demand driven by factors such as:
Commercial real estate investment
Balance sheet restructuring
Inventory financing
Capital investments
Mergers and acquisitions
Rising Credit Demand Across Sectors
The report also highlights a surge in credit demand across all loan types, with businesses and individuals seeking more financial support.
However, secured lending to households has declined, and mortgage loan demand has dipped.
CBN further noted that:
Corporate lending spreads widened, except for Other Financial Corporations (OFCs), which saw a slight narrowing.
Household credit demand grew, particularly for consumer loans and credit card lending.
Banking institutions continue adjusting lending strategies to match economic realities and monetary policies.
CBN’s Efforts to Stabilize Credit Markets
To ensure financial stability and support economic growth, the CBN is implementing measures to manage loan performance and encourage responsible lending.
These include:
Strengthening oversight on banks to reduce non-performing loans
Encouraging responsible borrowing and risk management
Enhancing monetary policies to balance loan accessibility and economic stability
What This Means for Businesses and Borrowers
With corporate loans performing at high rates, businesses can still access credit for expansion and investment.
However, the rise in non-performing loans signals a need for stricter risk assessment and financial planning.
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Share your thoughts in the comments—how do you think these credit trends will impact businesses in 2025?
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