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Nigeria — Commercial To Increase Collateral For Loans States CBN

In the Credit Survey report for the first quarter of 2018, the Central Bank of Nigeria, CBN stated that commercial banks have increased the requirements for collateral demanded from all business when collecting loan applications.

CBN headquarters

CBN Headquarters stated:

“More collateral requirements were demanded from all firm sizes on approved new loan application in Q1 2018. Similarly, lenders will demand more collateral from all firm sizes in the next quarter,” the report read.

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“The overall availability of credit to the corporate sector increased in Q1 2018 and was expected to increase in Q2 2018. This was driven by brighter economic outlook, changing sector-specific risks, changing appetite for risk, tight wholesale funding conditions and market share objectives.

“Lenders reported that the prevailing commercial property prices negatively influenced credit availability of the commercial real estate sector in the current quarter.

“Demand for corporate lending from all business sizes increased in the current quarter and were also expected to increase in the next quarter. Demand for overdrafts/personal loans in Q1 2018 was higher in comparison with other loan types.

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“The most significant factors that influenced demand for lending in the review quarter were the increase in inventory finance and capital investment.”