WorldStage Newsonline– The Central Bank of Nigeria (CBN) has expressed dissatisfaction with the Deposit Money Banks (DMBs) over the low level of credit facilities made available to the private sector to catalyze growth in the economy, saying credit growth had not been as good as thought.
CBN Governor, Mr. Godwin Emefiele told journalists after the Monetary Policy Committee meeting on Wednesday that between November 2017 to February 2018, the volume of credit from the banks practically platooned at N16 trillion, which he considered very low.
“For us to push for growth, the Deposit Money Banks must in one way or the other be encouraged to grant credit to those who need credit,” he said.
However, he acknowledged that the failure of the Federal Government to pay contractors’ debt currently put at N2.7 trillion was a key factor to the inability of the banks to inject credit into the economy.
He said it was important to appeal to the Federal Government to pay the contractors debts “because when they are unpaid, the contractors themselves are unable to service or pay back their loans at the banks.”
He said the CBN would soon come up some guidelines through the DBMs to encourage them to increase credit to the private sector in order to catalyze growth in the economy.
He said that the CBN will continue to adopt an unconventional monetary approach in line with its development finance objectives to accelerate credit to the weak, needy and priority sector of the economy at a single digit interest rate, to ensure that it plays the role of catalyze growth to the country.
“The central bank itself stands ready to accord some form of liquidity status to some of these debts and through that mechanism we believe the non-performing loans (NPL) will recede and then the banks can now continue to play their role which is to catalyze growth and support credit delivery to the Nigerian economy,” he said.
The CBN boss also called for the quick passage of 2018 budget by National Assembly, saying it will not only accelerate economy recovery pace, but deepen investor’s confidence.
Moreover, he said the MPC members advised the Federal Government to restrain from domestic borrowing in order to free credit lines for private sector to borrow, adding that the body also expressed concern over election expenses with 2019 general elections months away.
