The Central Bank of Nigeria said banking sector credit in 2021 reached N23.5 trillion with Other Financial Institutions (OFI); composed of microfinance banks, development banks, merchant banks and mortgage banks contributing N2.79 trillion or 10.62% of banking sector credit.
This was revealed in the personal statements of the members of the Monetary Policy Committee (MPC) at their last meeting held in November last year, published recently.
MPC member Adenikinju Festus, in his statement at the end of the meeting, noted that in October last year, banking sector credit was on the rise.
He noted that the CBN’s intervention funds were a major factor in increasing banking sector credit, saying, “All measures of sector size, bank credit, assets and deposits were higher. to corresponding values in October 2020. Of particular interest is the growth of credit to the banking sector, which increased from N19.39 trillion in October 2020 to N23.49 trillion in October 2021.
“The report on financing for development showed the overall and sectoral breakdown of central bank interventions in the economy. The sectoral distribution as well as the geopolitical distribution of the intervention showed that key sectors of the economy and Nigerians from different geopolitical areas benefited from the intervention funds.
“Nigerians, who otherwise would not have been able to access credit in the formal market, were able to benefit from the intervention funds. CBN interventions have stimulated both demand and real aspects of the economy. Stimulating demand is extremely critical given the size of consumption in overall GDP as well as the huge squeeze in real income caused by COVID-19. The increase in aggregate supply also has the ability to increase GDP as well as lower the general price level.
Meanwhile, he noted that despite the improvement in the country’s non-oil revenues, its ratio to gross domestic product (GDP) “is still too low and there is room for both non-oil and oil revenues to increase for boost the ability of governments at all levels to deliver on their promises to the Nigerian people”.