Nigerian Credit Increases First Time Since November 2010
Nigerian credit to the private sector rose 0.6 percent in July, the first increase since November 2010, as the banking system stabilized.
Private-sector lending advanced to 9.9 trillion naira ($64.4 billion) last month, the central bank said on its website today. The M2 money supply climbed 13 percent, up from 12 percent in June, the Abuja-based bank said.
The central bank set up the Asset Management Corp. of Nigeria, or Amcon, last year to buy the bad debts of banks to prevent a collapse in the industry. Banks received bonds for their debts that can be discounted for cash to enable them resume lending.
That injected more funds into the banking system, aiding the “rise in money supply and the marginal growth in credit,” Bismark Rewane, analyst and chief executive officer of Lagos- based Financial Derivatives Co., said by phone.
Still, credit growth remains weak as banks continue to avoid risk while rebuilding their balance sheets, Rewane said.
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