Banks

For the first time in three years, banks reduced consumer loans by 17 per cent (N400 billion), in one month, following a decline in money supply triggered by the inflation-fighting measures of the Central Bank of Nigeria, CBN. Consumer loans are lending by banks to one or more individuals for household, family, or other personal expenditures. Consumer loans have been rising in Nigeria since September 2019 when the CBN introduced the minimum loan to deposit ratio (LDR) policy which stipulates that banks must give out 65 per cent of their total deposits as loans. As a result, consumer loans rose steadily by 93 per cent to N2.33 trillion in May 2022 from N1.21 trillion at the end of June 2019. However, Financial Vanguard findings from CBN’s data indicate that at the third-year anniversary of the product in June 2022, the volume dropped by 17 per cent, month-on-month, to N1.93 trillion from N2.33 trillion in May 2022. Analysis of the data further showed that during the month, banks slashed personal loans to customers by 19 per cent, MoM to N1.45 trillion from N1.79 trillion in May. The banks also slashed retail loans by 13 per cent, MoM to N483 billion from N554.8 billion.
Vanguard