LENDERS HOPEFUL DESPITE MORE LOAN DEFAULTS-CBN SURVEY

In spite of increase in loan defaults across the board in the fourth quarter of 2016, lenders are hopeful that there will wind of change next quarter ( first one 2017).

According to the findings of the survey of lenders conducted by the Central Bank of Nigeria (CBN) between November 21 and 26, this year, the general view was that loan performance worsened within quarter four of 2016.

In particular, survey indicated higher default rates in secured and unsecured loans to households and even big corporate organisations not to talk of small and medium scale companies

There was also decrease in loan approval for small and medium scale companies within the period although the lenders reported increase in availability of both secured and unsecured credit.

However customers paid more to service new loans within the  quarter as spread between bank rates and CBN policy rate widened.

According to respondents to the survey it was only the spread on credit card lending that narrowed within the quarter and is expected to further narrow next quarter.

They also expect spread on overdraft to narrow next quarter after widening this quarter.

In all though, says the survey report, lenders are hopeful the quarter ahead will be better overall even in terms of default rate on existing loans.

This is based on their more positive expectations for the Nigerian economy in the near future.

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