The overall availability of credit to the corporate sector increased in quarter two, 2017 and was expected to further increase in quarter three, of the same year 2017, according to the Central Bank of Nigeria (CBN).
The major factors contributing to the increase in credit availability were brighter economic outlook, favorable liquidity conditions, tight wholesale funding conditions, changing sector specific risk and increased appetite for risk.
Lenders reported that the prevailing commercial property prices negatively influenced credit availability of the commercial real estate sector in the current and next quarters.
Similarly, lenders expect the prevailing commercial property prices to negatively influence secured lending to private non-financial corporations (PNFCs) in the current and next quarters.
The credit conditions survey reports released by the CBN revealed that availability of credit increased for all sized business except the other financial corporations (OFCs) in quarter two, 2017.
Similarly, lenders report credit availability for all sized businesses, except the large PNFCs and OFCs in the next quarter. Changes in spreads between bank rates and MPR on approved new loan applications to the small, medium, large PNFCs and OFCs widened in quarter two, 2017.
Conversely, Spreads for all size business types is expected to narrow in the next quarter except for medium PNFCs.
Also, the availability of unsecured credit provided to households rose in the current quarter and was expected to further rise in the next quarter.
Lenders reported brighter economic outlook, lower cost/availability of funds and higher appetite for risk as factors that contributed to the increase in quarter two,2017.
In the survey report, lenders were asked about trends and developments in credit conditions in the current and next quarters. The survey covers secured and unsecured lending to households, lending to non-financial corporations, small businesses and non-bank financial firms. Along with various data sources and discussions between the major lenders and bank staff, this survey serves as an input into the Monetary Policy documents which presents the CBN assessment of the latest trends in lending to the Nigerian economy.
HOPE MOSES-ASHIKE
