The total loans granted by banks to the private sector declined by N600.60 billion, from N16 trillion in the first quarter of 2017 to N15.34 trillion, in the second quarter of 2018.
A report by the National Bureau of Statistics (NBS) on Selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength (Q2 2018), showed that credit to the private sector declined for six consecutive quarters.
In the second, third and fourth quarters of 2017, banks lent N15.7 trillion, N15.83 trillion and N15.74 trillion respectively to the private sector.
By Q1 2018, the private sector received N15.6 trillion as loans from banks and N15.34 trillion as loans in Q2 2018.
Credit allocation to the oil & gas sector increased to N3.45 trillion in Q2 from the N3.42 trillion in Q1 2018, while finance to the manufacturing sector dropped to N2.02 trillion from the N2.07 trillion in Q1.
The money lent to the agriculture sector increased to N523.08 billion from the N501.6 billion recorded in Q1, power and energy dropped to N416.34 billion from N426.5 billion while mining and quarry also declined to N10.18 billion from N10.461 billion in Q1.
Credit to the government increased to N1.47 trillion from N1.41 trillion in Q1, trade/general commerce decreased from N1.054 trillion to N1.044 trillion.
Finance, insurance and capital market also dropped to N991.22 billion from N999.491 billion.
Frank Jacobs, president, manufacturers association of Nigeria (MAN), said the deposit money banks (DMB) had consistently shown unease to lend to the real sector of the economy.
“One of the greatest challenges facing the manufacturing sector in the country is lack of long-term financing and high-interest rate,” he said.
“It is quite disturbing to us that the banks are not lending as much as we need because that is the only way to grow the economy.”
He commended the Central Bank of Nigeria (CBN) for its plan to implement a special regime to make funds available to the manufacturing and agriculture sectors at nine percent interest.
However, Jacobs said giving loans to the manufacturing sector at five percent will spur economic growth, recovery and industrialisation.