The Central Bank of Nigeria (CBN) has revealed that the aggregate domestic credit of commercial banks grew by 7.61 per cent in October 2020, compared with 7.35 per cent in the previous month.
CBN made this known in communiqué number 133 of the Monetary Policy Committee (MPC) meeting held on November 23 and 24 and signed by the the CBN Governor, Godwin Emefiele.
This it said was as a result of the bank’s policy on Loan-to-Deposit Ratio, supported by its interventions in the various sectors of the economy, adding that total bank credit grew in the banking industry by ₦290.13 billion between the end of August and the middle of November.
The communiqué added, “Total gross credit by the banking industry stood at ₦19.54 trillion as at November 13, 2020, compared with ₦19.33 trillion at the end of August 2020, an increase of ₦290.13 billion.
“When compared with ₦15.56 trillion at the commencement of the LDR policy in May 2019, total gross credit increased by ₦3.97 trillion, these loans were granted mainly to manufacturing (₦738 billion), general commerce (₦874 billion), agric and forestry (₦301 billion), construction (₦291 billion), and ICT (₦231 billion), just to mention a few.”
The communiqué noted further that the MPC observed the gradual improvement in manufacturing and non-manufacturing Purchasing Managers’ Indices (PMIs), which rose to 50.2 and 47.6 index points respectively, in November 2020, compared with 49.4 and 46.8 index points in October 2020.
It added, “This development signposts an increase in economic activities, driven by growth in new orders, improved supply delivery time, rising production levels and new export orders. The employment level index component of the manufacturing and non-manufacturing PMIs also improved in November 2020 to 47.3 index points and 46.7 index points, respectively, compared with 46.0 index points and 44.2 index points in October 2020.
“The committee, however, noted the likely downside risk to the growth of the recent unrest in the country, warning that this may adversely impact economic recovery in the near term.”