Business

CBN: Credit To Households Rises In Q2 2020

Pinterest LinkedIn Tumblr

Secured credit to Households rose from -36% in the first quarter of 2020 to -7.4% by second quarter of 2020 (Q2).

CBN: Credit To Households Rises In Q2 2020
: Credit To Households Rises In Q2 2020

This was disclosed in the Central Bank of ’s Credit Conditions Survey Report for Q2 that was released on Monday.

In the same vein, Credit scoring criteria recorded an increase of 3.6% despite being at a fixed level in the last four quarters and is expected to jump to 8.7% by Q3 2020.

According to the report, the maximum loan to income ratios stood at 2% in Q2 2020, a decline of 0.7% points compared to 2.7% recorded in the previous quarter and is expected to remain unchanged (0%) by Q3 2020.

Also, Borrowers willing to lend with high loan to value ratios grew by 10.6% as against -7.6% recorded in the previous quarter.

It attributed the increase in supply of the secured credit to the “Changing appetite for risk,” with increased market share objectives and tighter wholesale funding conditions outlook as the likely contributory factors.

It stated, “Lenders expect to further tighten the credit scoring criteria but preempt the proportion of approved households’ loan applications in Q3 2020 to increase.

“Maximum Loan to Value (LTV) ratios decreased in Q2 2020 and is expected to remain unchanged in Q3 2020. Lenders were not willing to lend at low LTV ratios (75% or less) in both Q2 and Q3 2020.

“But were willing to lend at high LTV (more than 75%) in Q2 and Q3 2020. The average credit quality on new secured lending improved in Q2 2020 and is expected to improve further in Q3 2020.”

Adelowo Adegboyega
Link Up
OduNews on Google News

Submit press release, news tips to us: [email protected] | Follow us @ODUNewsNG