SMEs non-performing loans hit N1.32tn, blame economic challenges

<p>Banks non-performing loans hit N1.32tn as of the end of April 2023, figures obtained from the Central Bank of Nigeria have revealed.</p>, <p>According to figures obtained by The PUNCH from the CBN, this figure represented 4.3 per cent of the total credit in the banking sector which stood at N30.64tn.</p>, <p>The loans in the sector had maintained a steady increase, following the Loan to Deposit Ratio order of the CBN that mandated banks to increase their loans’ ratio to the public.</p>, <p>According to the figures, the banks’ gross credit was N29.72tn as of the end of December 2022, with non-performing loans of N1.2tn or 4.2 per cent of the total credit</p>, <p>However, challenges in the economy, which was further worsened by naira crunch crisis in the first quarter of the year, a challenge that crippled many businesses, created repayment challenges for many businesses.</p>, <p>A Monetary Policy Committee member, Aliyu Sanusi, said in his statement released by the CBN that in April 2023, “The non-performing loans ratio was 4.3 per cent, and was below the regulatory maximum of five. Furthermore, Liquidity Ratio stood at 45.3 per cent, above the regulatory minimum of 30 per cent. These suggest that the banking system continues to remain safe, sound and resilient.</p>, <p>“The industry’s total assets and gross credit to the economy have sustained an upward trend, the former grew year-on-year by N16.65tn or 25.88 per cent to N80.97tn in April 2023. The upward trend in total credit to the economy had continued since 2019 following the bank’s Loan to Deposit Ratio policy, standing at N30.64tn as of April 2023.”</p>, <p>The SMEs in the country fell into naira crunch challenge, after many of them survived the COVID-19 pandemic. The CBN had restructured its intervention loans to the SMEs, after extending five per cent interest rate, introduced to cushion the effect of COVID-19 on the economy by one year.</p>, <p>Agusto & Co said in its report titled, ‘Redesign gone wrong? – Costly cashless’, that, the disruption to tra