Why poor growth in credit, economy subsist, by Sekibo

The challenge of credit expansion and economic growth had gradually crept into activities 15 months ago, but later took a dramatic turn that led to recession.

But these challenges were riding on the back of scarcity of foreign exchange as oil prices plummeted, but also aggravated by militancy in the Niger Delta.

The Managing Director and Chief Executive Officer of Heritage Bank Plc, Ifie Sekibo, who made the observations while receiving awards from the Institute of Credit Administration (ICA), noted that the declined oil fortunes affected the country’s foreign exchange earnings and foreign investments.

Represented by the Executive Director, Jude Monye, he said these factors had culminated in the contraction of Nigeria’s Gross Domestic Product over the last three quarters.

According to him, empirical studies have shown that efficient provisioning of credit has a positive effect on output and employment opportunities.

He said that while a low level of financial development and its attendant inefficient private sector credit system distorts economic growth, strong and inclusive financial system plays vital roles in financing projects and activities that would promote economic growth and development.

“The role of credit in economic development has been recognised as credits are obtained by various economic agents to enable them meet various needs.

“The banking sector, of which Heritage Bank is a part, helps to make these credits available by mobilising surplus funds and channeling such funds in form of credit to investors who have brilliant ideas on how to create additional wealth in the economy.

“Heritage Bank loan portfolio showed remarkable growth from N25 billion in 2013, N41 billion in 2014 to N175 billion in 2015 because of the recently concluded business combination with the former Enterprise Bank Limited which has further expanded its franchise,” he said.

Meanwhile, ICA has given Sekibo and other senior officials of the bank outstanding awards at the Nigeria Credit Industry Awards held in Lagos.

Sekibo was conferred with Corporate Credit Provider of the Year, while Mrs. Adaeze Udensi, an Executive Director of the bank was awarded Credit Management Director of the Year.