Two of Nigeria’s biggest banks gave out smaller amount of loans in 2018, compared to the previous year as financial institutions remained cautious in creating risk assets, considering the sluggish economic activities in the country.
The Nigerian economy which has been performing sub-optimally recorded slim Gross Domestic Product growth of 1.93 per cent in 2018, with businesses facing a myriad of domestic challenges. Some of the major constraints businesses faced include insecurity, high interest rate, unstable power and poor infrastructure.
“If economic activities are not expanding, the way we have seen in the last few months, there would not be activities to lend money to. “Our economy is not growing at the level that it should be growing. So, the banks are being careful, because in a fragile economy, credit creation would remain low.”