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🇳🇬 Nigeria /Economy & Trade

Banks slash lending, cut N5.4trn across key sectors

From Vanguard · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Nigerian banks reduced lending to key economic sectors by N5.45 trillion, a 14.8% year-on-year decrease.
  • Sectors affected include oil and gas, and information and communication technology, with experts citing forbearance withdrawal and FX stability as reasons.
  • This reduction reflects underlying structural challenges within the economy, according to the Manufacturers Association of Nigeria.

Nigerian Deposit Money Banks have significantly curtailed lending to crucial economic sectors, slashing loans by N5.45 trillion, or 14.8 percent, over the past year. The oil and gas and information and communication technology sectors were among those most affected by this contraction in credit.

Experts attribute this sharp decline in lending to a combination of factors, including the withdrawal of forbearance measures and increased foreign exchange stability. These shifts have altered the lending landscape for banks, prompting a more cautious approach to credit allocation across the economy.

The Manufacturers Association of Nigeria (MAN) views this trend as a reflection of persistent structural challenges within the nation's economy. The reduced access to finance for key industries could potentially hinder growth and investment, underscoring the need for broader economic reforms.

It reflects structural challenges

— MANThe Manufacturers Association of Nigeria commenting on the reduction in bank lending.
DistantNews Editorial

Originally published by Vanguard. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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