Loans worth 7.8 trillion naira ($20 billion) to 35,640 customers are being reorganized out of 18.9 trillion naira in credit across the industry, Central Bank of Nigeria Governor Godwin Emefiele said on Monday. Twenty-two of the nation’s lenders are involved in the transactions, he said.
“If the CBN did not ask the banks to grant these forbearance to their customers, the loans will go bad immediately by our prudential ratios,” Emefiele said. He was speaking after the monetary policy committee decided to hold the benchmark interest rate at 12.5%.
The central bank would be more comfortable if 65% of loans were being restructured, he said.
A lockdown to contain the Covid-19 outbreak, a drop in oil prices and rampant dollar shortages have dealt a blow to the economy of Africa’s largest crude producer, hindering the ability of borrowers to repay their debt.
The ratio of non-performing loans to total credit improved to 6.4% in June from 11.1% a year earlier, while the industry’s average capital adequacy ratio stood at 15% from 15.2% previously, Emefiele said.
SOURCE:BUSINESS DAY
