Expert Decries Low Banking Sector Credit To Businesses

     The Managing Director/Chief Executive Officer, Afrinvest West Africa Limited, Mr. Ike Chioke, has denounced the low contribution of banking sector credit to small businesses, manufacturing and agric sectors.


He pointed out that banking sector lending to the above-mentioned sectors remained at single digit.

Chioke, stated this in Lagos, at the launch of the Afrinvest Banking Sector Report and  the firm's 20th anniversary dinner.

He pointed out that Nigerian banks will have to become more proactive in lending to the real sector if they are to survive the next decade.

Commenting on the findings of the report, he explained: “Banks would have to be more agile to make more money in the years ahead. Most Nigerian banks are taking more aggressive look at their cost structure and also adopting more strategies to take their customers online to cut costs.”

Citing the BRIC countries as examples, he said: “No country grows with a low lending to the real sector. Lending in the BRICS country is much more diversified and do impact more on the real sector than what we have in Nigeria. Most of our lending is concentrated in the oil and gas sector.”

He further noted that presently, the oil and gas sector, which contributes about 11 per cent to Nigeria’s Gross Domestic Product (GDP) takes up more than 27 per cent of the credit given by Nigerian banks, while the power sector a new entrant, which contributes about 0.6 percent gets about five per cent of banking sector credit.

Adding that the fears of recession may be overblown, he said the reforms being undertaken by the government and an increased focus on infrastructure  will  allow bank to reposition their portfolio.

Accessing the banking sector, he added:  “We have not seen the level of non performing loans we saw between 2008 and 2009 as a result. Nigerian banks seem much more resilient and more prepared going forward in the years ahead.

“There has been very strong growth performance amongst the the tier 1 and tier 2 banks. We have seen top line growth in high single digits, and we have seen bottom line growth in the double digit area. So all the banks seem to have done well not withstanding what should be a constrained economy,” he added.