Nigerian Banks increased their total loans to the Nigerian economy by N3.3 trillion in June 2020. This is according to information contained in the monetary policy communique of the central bank read out on Monday by the governor, Godwin Emefiele.
According to Mr. Emefiele, bank aggregate domestic credit grew by 5.6% in June 2020 compared with 7.7% growth recorded in the month of May 2020. This resulted in a total increase in gross credit from N15.56 trillion in May to N18.9 trillion as at end of June 2020. The CBN attributes the increase to its Loan to Deposit Ratio initiative, a policy that forces banks to lend at least 65% of its deposits.
“Aggregate domestic credit (net) grew by 5.16 per cent in June 2020 compared with 7.47 per cent in May 2020. The Committee commended the CBN Loan-to-Deposit Ratio (LDR) initiative to address the credit conundrum as the total gross credit increased by N3.33 trillion from N15.56 trillion at end-May 2019 to N18.90 trillion at end-June 2020. Emefiele.
“The Committee is hopeful that upon further drawdown of these intervention facilities, the much needed reset and rebound of the Nigerian economy will become a reality,” he said.