The Central Bank of Nigeria (CBN) has revealed that 91% of corporate loans issued by banks remain performing, indicating a strong repayment trend among businesses.
In its latest Credit Conditions Survey, released over the weekend, the apex bank noted that only 9% of corporate loans were non-performing in the fourth quarter of 2024. This figure exceeds the regulatory benchmark of 5% but marks an improvement from previous quarters, where corporate loan defaults fluctuated between 2.8% and 6.2%.
The report highlighted key factors driving corporate credit demand, including commercial real estate, balance sheet restructuring, inventory financing, capital investments, and mergers and acquisitions. The CBN also noted increased availability of credit for corporate borrowers, though secured lending to households declined.
“The demand for credit across all lending types increased in the fourth quarter of last year,” the report stated. “Inventory finance played a major role in driving corporate lending, while consumer loans and credit cards contributed to higher demand for household credit.”
However, the survey found a decrease in demand for mortgage and re-mortgage loans among households. The CBN also observed a widening of loan spreads relative to the Monetary Policy Rate (MPR) for both secured and unsecured household loans, as well as most corporate lending types.
The Credit Conditions Survey evaluates secured and unsecured lending to households, private non-financial corporations, small businesses, and other financial corporations. The findings are based on lender responses weighted by market share to assess overall credit market trends.
Despite the increase in non-performing loans, the CBN’s report suggests a growing appetite for credit across sectors, reflecting economic activity and businesses’ need for financial support.
