New CBN report shows a drop in credits to key sectors and consumers 

In the month of May, credit to key sectors of the economy and consumers declined by 0.6% and 0.9% respectively.

This is according to the Central Bank of Nigeria’s Monthly Economic Report for May 2023 obtained by Nairametrics.  

Sectoral credit 

According to the report, credit utilisation to key sectors of the economy dropped from N30.347trillion in April 2023 to N30.181trillion. This represented a 0.6% drop.  

The report further noted that in terms of distribution of credit, the service sector accounted for over half of credits for the Month followed by industry with 41.0% and agriculture with 5.9%.  

• The report stated, “Total credit to key sectors of the economy declined by 0.6 per cent to N30,181.81 billion at the end of May, compared with N30,347.31 billion in April. Credit utilisation across all the sectors declined, with agriculture, industry, and services sectors falling by 4.7 per cent, 0.35 per cent, and 0.21%, respectively. 
• “In terms of relative share in sectoral credit, the services sector, at N16,012.25 billion, accounted for the largest share (53.1%), followed by industry (N12,380.93 billion) and Agriculture (N,1,788.63 billion), which accounted for 41.0 per cent and 5.9 per cent, respectively.” 

It is important to note that the service sector constitutes finance, insurance, trade capital markets etc. while the industrial sector is made up of manufacturing, oil and gas etc.  

Consumer credit 

On the other hand, credits to consumers dropped by almost 1% from N2.367 trillion in April to N2.34 trillion in the month under review. Of the consumer credit, 71.8% were personal loans while 28.2% were retail loans.  

• The report noted, “Similarly, consumer credit decreased by 0.9 per cent to N2,345.16billion in the review month, from N2,367.38billion at the end of April. Of the total claims on the private sector (N29,953.39 billion) at the end of May 2023, the share of consumer credit stood at 7.84 per cent, relative to 7.83 per cent in the preceding month.” 

Liquidity and lending rate 

The report further stated that liquidity in the banking industry increased by 39.5% from N236.99 billion in the month of April to N330.60 billion.

The apex bank explained that the liquidity increase was a result of injections from FAAC, Nigeria Treasury Bills and CBN maturity bills at N655.93 billion, N324.43 billion and N85.00 billion, respectively.  

The report further noted that lending declined from N4.1 trillion to N714 billion for the month mainly due to the increased liquidity in the banking system.