Regulatory measures to improve lending to the real sector of the Nigerian economy
In its efforts to further stimulate growth of the Nigerian economy through investment in the real sector, the Central Bank of Nigeria has announce new guideline.
In a letter address to all Nigerian Banks, Central bank of Nigeria state that all deposit money banks are required to maintain a minimum Loan to Deposit Ratio (LDR) of 60% by September 30, 2019. subject to quarterly review. In order to encourage SMEs, Retail, Mortgage and Consumer lending, CBN will provide a framework for classification of enterprises/businesses that fall under these categories, these sectors shall be assigned a weight of 150% in computing the LDR. Failure to meet the stated minimum LDR by the specified date shall result in a levy of additional Cash reserve Requirement equal to 50% of the lending shortfall of the target LDR.
CBN stated it will continue to review developments in the market with a view to facilitating greater investment in the real sector of the Nigerian economy.