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Banks give N12.05trn credit to private sector in four years
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The governor said the amount given out as credit by banks has continued to rise gently over the years, until the steep rise between 2006 and 2007.
A total of N1.2 trillion was given out in 2003, N1.52 trillion in 2004, N1.99 trillion in 2005, N2.52 trillion in 2006, and N4.81 trillion in 2007.
Economic and financial experts say with increased credit to the private sector, more people will be employed and the country’s productivity level will be enhanced.
The snag, however, is that, the agriculture sector which offers more employment opportunities and contributes much bigger share to the nation Gross Domestic Product (GDP) got very little credit from banks during the period.
The agriculture sector got only N377.37 billion, about 3.07 percent of total credit given out between 2003 and 2007.
The oil and gas sector which contributes little to GDP and employs few Nigerians got a larger chunk of the credit from banks.
The sector got N2.79 trillion or 23.15 percent of total credit given out during the period.
Also, another important sector of the economy, the manufacturing sector was at the lower wrung of the ladder as it got lean credit from the banks.
Some bankers who do not want their names in print told Business Day that banks are not charitable organisations that give out loans based on sentiments. Rather, they said, they are in business to make profit.
They explained that with the level of infrastructure in the country, giving so many loans to, for instance, the agriculture sector that operates on old tools, would amount to not recouping your loans soon, as some of them may end up as bad or non-performing loans.
They also said that with the state of electricity in the country, giving loans to the manufacturing sector would hardly yield any dividend as the amount spent on generating their own electricity is crippling.
They however said that with the coming of microfinance banks, more loans will reach these hitherto abandoned sectors, and so more productivity will be seen.
A total of N1.2 trillion was given out in 2003, N1.52 trillion in 2004, N1.99 trillion in 2005, N2.52 trillion in 2006, and N4.81 trillion in 2007.
Economic and financial experts say with increased credit to the private sector, more people will be employed and the country’s productivity level will be enhanced.
The snag, however, is that, the agriculture sector which offers more employment opportunities and contributes much bigger share to the nation Gross Domestic Product (GDP) got very little credit from banks during the period.
The agriculture sector got only N377.37 billion, about 3.07 percent of total credit given out between 2003 and 2007.
The oil and gas sector which contributes little to GDP and employs few Nigerians got a larger chunk of the credit from banks.
The sector got N2.79 trillion or 23.15 percent of total credit given out during the period.
Also, another important sector of the economy, the manufacturing sector was at the lower wrung of the ladder as it got lean credit from the banks.
Some bankers who do not want their names in print told Business Day that banks are not charitable organisations that give out loans based on sentiments. Rather, they said, they are in business to make profit.
They explained that with the level of infrastructure in the country, giving so many loans to, for instance, the agriculture sector that operates on old tools, would amount to not recouping your loans soon, as some of them may end up as bad or non-performing loans.
They also said that with the state of electricity in the country, giving loans to the manufacturing sector would hardly yield any dividend as the amount spent on generating their own electricity is crippling.
They however said that with the coming of microfinance banks, more loans will reach these hitherto abandoned sectors, and so more productivity will be seen.
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