SUPPLY of secured and unsecured credits to households will increase in first quarter of the year, the Central Bank of Nigeria’s (CBN’s) fourth quarter 2020 Credit Conditions Survey report has shown.
The report indicates that the availability of secured and unsecured credits to households increased in fourth quarter of last year and is expected to rise further in the first quarter of 2021.
The survey report, conducted last December, presented trends and developments in credit conditions in the fourth quarter, and its expectation in the first quarter of 2021.
The report noted that changing economic outlook and increased market share objectives were major factors responsible for the increase in supply of secured credit. In addition to these factors, improving economic outlook contributed to increased availability of unsecured credit in fourth quarter 2020.
These factors, according to the report, are part of the forces expected to drive increased credit in first quarter 2021.
Despite increased availability of secured and unsecured credit in the fourth quarter of 2020, request for secured lending for house purchase decreased in fourth quarter of 2020. Lenders, however, expect demand for such lending to increase in first quarter of 2021.
While lending for purchase of houses decreased, demand for mortgage/remortgaging from households increased in fourth quarter 2020 and is expected to increase in first quarter of 2021.
The report notes that the proportion of secured loan applications approved decreased. This is understandable, considering that lenders tightened the credit scoring criteria, according to the report.
Further, demand for total unsecured lending from households increased in fourth quarter of 2020 and is expected to increase in first quarter of 2021.
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