Managing Director and Chief executive of Afrinvest Nigeria, Ike Chioke, has called on banks to step up lending to real estate sector which has been a slow decline.
According to Chioke, the banks will have to become more proactive in lending to the real sector if they are to survive the next decade.
The Central Bank of Nigeria (CBN)’s economic reports for the first and second quarter of the year, showed that total assets/liabilities of banks had fallen to to N28.401 trillion in the second quarter from N28.587 trillion in the first quarter.
Similarly, banks’ lending to the economy dropped by 1.1 per cent to N17.262 trillion in the second quarter from N17.280 trillion in the first quarter. This is in sharp contrast to the development in the first quarter, when total assets grew by 4.4 per cent and lending to economy increased by 4.38 per cent.
The Afrinvest boss, who spoke at the launch of the Banking Sector Report and 20 Years Anniversary dinner of Afrinvest, Chioke lamented that despite the huge contribution of the real sector to the country’s GDP, the percentage of banking sector credit to manufacturing, small businesses and the agriculture sector still remains in single digit.
Citing the BRICs countries as examples, he said no country grows with a low lending to the real sector.
Chioke said that “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.”
This post was last modified on January 17, 2016 9:12 AM