• Cut of interest on deposits

• Total loans to businesses hit N18.90tr

Customers are paying more on loans and getting less on deposits from commercial banks, a Central Bank of Nigeria (CBN) report has said.

They paid between 15.01 per cent and 30.70 per cent on borrowed funds but the interest paid on their term deposits dropped by 1.46 per cent to 6.27 per cent, the CBN’s economic report for the first quarter of the year shows.

The report released at the weekend, indicated that the average prime and maximum lending rates rose by 0.02 per cent point and 0.47 per cent point, respectively, to 15.01 per cent and 30.70 per cent, in the review period. The percentage were above their levels in the preceding quarter.

The average prime and maximum lending rates stood at 29.98 per cent and 14.99 per cent respectively in the fourth quarter of last year.

The rising lending rates, analysts said, have led to upward pressure on market rates and cost of production for the manufacturing sector.

The CBN observed that despite the rise in lending rates, banks were paying less deposit interest to depositors. The average term deposit rate fell by 1.46 percentage points to 6.27 per cent. The spread between the average term deposit and average maximum lending rates widened by 1.93 per cent points to 24.43 per cent points.

The margin indicated that customers are paying 24.43 per cent higher fee than they are getting from banks.

However, the Monetary Policy Rate (MPR), which is the benchmark for interest rate at which the CBN lends to the commercial banks, is currently at 12.5 per cent.

Despite the rise in lending rates, CBN Governor, Godwin Emefiele said aggregate domestic credit (net) grew by 5.16 per cent in June 2020 compared with 7.47 per cent in May 2020.

The total gross credit in Nigeria rose by N3.33 trillion from N15.56 trillion at end-May 2019 to N18.90 trillion at end-June 2020.

These credits were largely recorded in manufacturing, consumer credit, general commerce, and information and communication and agriculture, which are productive sectors of the economy.

The CBN said the the rise in interest rate reflected liquidity in the system. It explained that the inflation rate of 12.26 per cent for March 2020 resulted in negative real rates for deposits, but positive real rates for the prime and maximum lending rates.

“With the headline inflation at 12.26 per cent in March 2020, all deposit rates remained negative in real terms, while prime and maximum lending rates were positive in real term,” the report said.

Continuing, the report showed that money market rates were generally stable and moved in tandem with the level of liquidity in the first quarter of 2020. Daily interbank call and Open Buy Back (OBB)-discountable securities traded in the Nigerian Inter- Bank financial transactions- rates ranged from five per cent to 7.24 per cent and 1.77 per cent to 21.02 per cent, respectively.

The average interbank and OBB rates were 10.68 per cent and 12.08 per cent, respectively. Other rates, such as the seven-day and thirty-day Nigerian Inter-bank Offered Rate (NIBOR) traded at 11.74 per cent and 9.81 per cent, respectively.

NATION

Not too long ago, CBN forced banks to give out loans. So they did not cap the interest rate?

I don't know why I am supporting this APC

Whick kind wahala be dis now

Chai!

Okay. I kukuma hate borrowing

If not for safety and cashless policies, why exactly would i invest in banks, awon oloshi looking to make profits even when the economy suffers when you raise CSR issues now dem go tell you to off mic, anyways na game una dey play, we go play am together

This government just wants to push Nigerians to the wall finally and conclusively. No palliatives but a raft of stringent policies including increased taxes, harsh market and economic policies, high interest rates, rent tax, increased cost of goods, high transportation costs and a display of a host of very insensitive forms of governance unfamiliarly different in global politics. Small Ghana just added three additional months of free light and water to benefit Ghanaians.

But we shall rise above these storms like a phoenix.

Nigeria is rule by wicked and heartless motherfuckers.

Hmm

Na mumu dey keep money for bank with this our inflation rate

We have agric tech
And many other opportunities in traDing stocks and fx to grow wealth

If 1M does not yield at least 50k a month wherever I keep it. Its waste of money

If your savings dont grow at least 30% per annum. Your losing money in this economy

Hmmmmmm. Not looking interesting.

Ok

Hmmm

Things are getting out of hand. It is almost practically impossible to live ok in Nigeria. Naijabad.

For this Corona time

Without palliative?

Nigeria don finish.

Naija no dey disappoint

Banks killing their customer with unnecessary loan interest.
If you can't get your family member or closed friends to lend you stay away from all these thief called Bank

Loans?

Easy way to get heart attack

Islie:
• Cut of interest on deposits

• Total loans to businesses hit N18.90tr



NATION

These banks are not supporting the ordinary citizens with adequate access to soft loans. Why increase lending rates outrageously

Isn't that too small, expected 95%. Since the real businessmen easily have access to the fund in the first place.

Omooba77:

Lending rate is 30% but deposit is less than 5% and doing business is very easy indeed!

Yes oh, the govt is working very hard to create a workable business environment, at least the person just still need to pay: company rent, taxes, bank charges, wast bills, power bills & yet get a generator on standby with high cost of diesel, security, patch the road in front of the office, etc.

Islie:
• Cut of interest on deposits

• Total loans to businesses hit N18.90tr



NATION

Lending rate is 30% but deposit is less than 5% and doing business is very easy indeed!

Does this make sense...

As a Niggerian you get screwed from every quarter and instead of people to fight getting screwed, they blame you for getting screwed.

You sanction banks for not borrowing but now you complain about their interest rate are you okay@CBN

Why keep money in the Bank ?

Nigeria my country..
The government scamming its citizens...

They know there will be a high demand for loans, they are milking the situation well,

Sysdatek:
Na mumu dey keep money for bank with this our inflation rate

We have agric tech
And many other opportunities in stocks and fx to grow wealth

If 1M does not yield at least 50k a month wherever I keep it. Its waste of money

If your savings dont grow at least 30% per annum. Your losing money in this economy

Not in Nigeria again.