Private Sector: Banks’ Lending Up by 0.5%

Net loans from the banking system to the private sector increased in May by just 0.5% month-on-month and 7.0% year-on-year, a report by FBN Capital has shown.

The private sector in this case is defined as the domestic economy other than the Federal Government of Nigeria (FGN), and thus includes the state governments, whose borrowings amounted to ₦691 billion ($4.3 billion) at end-April this year.

Analysts at FBN Capital, according to the report, noted that the total for the private sector in May was ₦15.5 trillion ($96.8 billion).

FBN Capital however, pointed out that for many banks, the temptation remained to lend to the FGN by buying debt instruments, which yielded up to 14% and pay coupons free of tax.