The fall in oil prices will be taking a harder toll on companies in major sectors of the Nigerian economy as Deposit Money Banks have started reducing lending to them by as much as 50 per cent, reports have said.
It was gathered that corporate customers in sectors that are likely to be affected by the proposed cut in government spending this year are already encountering difficulties in accessing credit facilities from their lenders.
A top banker said: “The banks are already cutting credit lines to certain categories of corporate customers whose cash flows are likely to be heavily affected by the proposed cut in government spending this year. Nigerian airlines, travel agencies and companies that depend on government patronage are among these categories.”
“Some credit lines will be stopped completely. This has led to a situation whereby those companies that used to get say N1bn or N500m in a month can only get about half of the amounts or less now.”
The development is coming on the heels of the continuous slide in the prices of crude oil in the international market.
Already, existing loan obligations to banks by some companies in the oil and gas sector were being threatened as the firms’ fortunes continued to be affected by the falling oil prices and weak demand for crude oil and other export commodities in the global market.