Nigerian Lenders Set To Increase Credit To Households In 2021 – Report

Nigerian lenders have indicated that they will increase credit to households in the country in 2021. They are certain that the success recorded in the fourth quarter of 2020 will linger till the first quarter of 2021, according to a report published by the Central Bank of Nigeria (CBN).

The report released by the CBN in December 2020 said lenders increased both secured and unsecured credit to households across the country in 2020. (Secured lending explains a situation when the borrower is required to give the lender collateral as a form of insurance against defaulting on the loan. If the borrower defaults on the loan, the lender can seize the collateral to recoup its loss. On the other hand, an unsecured loan is a loan that doesn’t require any type of collateral.)

The document titled ‘Credit Conditions Survey Report’ conducted by the Bank in December 2020 indicated that the availability of secured credit to households increased in fourth quarter of 2020 and is expected to increase in the first quarter of 2021.

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Additionally, the lending institutions reported that the availability of unsecured credit to households increased in Q4 2020, noting that it is expected to increase in Q1 2021.

The survey cited changing economic outlook and increased market share objectives as major factors responsible for the increase in supply of secured credit.

The survey covers secured and unsecured lending to households, lending to Public Non-Financial Corporations (PNFCs), small businesses and Other Financial Corporations (OFCs).

“Most lenders cited improving economic outlook and increased market share objective as contributory factors for the increase. The overall availability of credit to the corporate sector increased in Q4 2020 and is expected to increase in Q1 2021, due to “Changing sector specific risk and market share objectives,” the CBN noted.

The report revealed that request for secured lending for house purchase decreased in Q4 2020 but lenders expect demand for such lending to increase in Q12021.