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AFWN2018

AFWN2018
AFRICA FASHION WEEK NIGERIA

Monday, August 6, 2018

Nigeria Banks’ Weak Risk Appetite Hurting Real Sector

The business and investment ecosystem in Nigeria today is one that is grappling with liquidity related challenges as maximum interest on business loans stands at a ten high of average 31.46 so far in 2018, signalling low risk appetite of commercial banks. 


Commercial banks’ maximum lending rate according to the Central Bank is the rate charged by deposit money banks for lending to customers with low credit rating has been on a steady upward trajectory from May 2008 to the end of May this year according to data from the Bloomberg Terminal.

A source in a tier one bank told BusinessDay off record that “most of the time, we avoid these start-ups because they don’t have the track records. If you have at least 3 years financial statement of any company, you can do your ratios and actually determine how profitable the company is but starts up normally do not have these. 

 “If you are giving out loans you must know that you can get it back else, these loans become bad loans and it greatly affects banks liquidity.” 

He further noted that the promoters of some start-ups are inexperienced, so to avoid been used as test run for their business, banks shy away from giving out loans to them. 

● Businessday 

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