‘Large industrial firms still dominating credit allocation to manufacturing sector’
Indeed, the data revealed that in the third quarter of 2018, a total volume of 5,294,871,285 transactions valued at N340.15 trillion were recorded.
In terms of credit to private sector, the total value of credit allocated by the bank stood at N15.59 trillion as at Q3 2018, with the oil & gas and manufacturing sectors receiving credit allocation of N3.59 trillion and N2.15 trillion to record the highest credit allocation as at the period under review.
Of the N2.15 trillion allocated to the manufacturing sector during the quarter under review, the Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf stated that it would be insightful to see the breakdown of sectors accessing the credit and size of businesses accessing the credit.
On a quarter on quarter basis, growth was negative for the first two quarters of 2018.
Q1 credit stood at N15.6 trillion, dropped to N15.3 trillion in the second quarter of 2018, before rebounding slightly to N15.5 trillion in the third quarter of 2018.
“From our standpoint, knowing the details of the credit allocation will help to assess impact on employment, poverty reduction and economic diversification. This can only happen when you have more small businesses and industries accessing these credits as it will impact more on inclusiveness and job creation.
“I think exposure will likely be to the big companies and not the small businesses. This is because the biggest complaints are still coming from the small scale industries as most of the funds they access come from the development finance institutions like the Bank of Industry (BoI).
“It will be interesting to know the components of the funds coming from the development finance institutions and commercial banks because I doubt if any of our commercial banks will have this huge exposure to the manufacturing sector”, Yusuf added.
On its part, the Manufacturing Association of Nigeria (MAN) reaffirmed the need for a lower interest rate for the funds to achieve the desired impact in the real sector.
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