FBNQuest, merchant banking and asset management business of First Bank Nigeria Holdings, says loans collected by customers in deposit money banks increased by 21 percent to N3.3 trillion in 12 months.
This was disclosed by Gregory Kronsten and Chinwe Egwim, macroeconomic and fixed income researchers at FBNQuest, in a report on Monday.
The report, titled “The Macro Impact from COVID-19″, identified how the pandemic affected business patterns, adding that the economy should experience some level of rebound in 2021.
“One bright spot has been the 21 percent increase (N3.3trn) in the loan books of deposit money banks over 12 months,” the report read.
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“For manufacturing, the increase has been closer to 35 percent. As well as leaning on the banks to boost lending as their regulator, the Central Bank of Nigeria (CBN) has also multiplied and deepened its own credit interventions over the period.
“The beneficiaries are not identifying themselves and probably include few small and medium-sized enterprises (SMEs), yet the increase should help businesses in their hour of need.
“Its (Nigeria’s) large agricultural economy and sizeable domestic market, together with limits to its international integration, together mean that its gross domestic product (GDP) will contract in 2020 by rather less than many of its peers.
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“For the same reason (its uneven development), the rebound next year is set to be modest.
“Closing with the impact of the virus on inflation, there are downward pressures such as a further weakening in consumption patterns due to the lockdown.
“However, there are also upward pressures such as the shutdown of factories and general supply chain disruptions.
“Our take is that the headline rate will see a further modest rise to 13.1 percent year-over-year at year-end 2020 from 12.6 percent in June.”
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FBNQuest added that the Nigerian economy is likely to contract “ at a little more than -3 percent this year”.
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