Bank customers expect more access to loans, says CBN

Bank customers are getting more confident of getting  access to credit in the coming months, the Monthly Business Expectation Survey for June has shown.

The report, released by the Central Bank of Nigeria (CBN) captured respondents’ optimism  on access to credit in  the  review  month, with an index of 4.4 points.

It also noted that the outlook on volume of total order and business activity was more optimistic, as the index stood at  16.4 and 16.1 points, respectively when  compared  to 15.1 and 16.1 points, recorded in May.

“Similarly, respondents’  outlook  on financial conditions (working  capital) and average  capacity utilisation  improved, as  the  indices  stood  at 11.7 and  23.4 index   points, when compared  with  the 14.1 and  22.7 points,  recorded  in May 2018,” it said.

According to the report, the improvement in the average capacity utilisation (CUI) index can be attributed to  the  positive  outlook  on financial conditions.

“The positive outlook in the volume of business activities (66.7 index points) and  employment (27.0 index  points) indicated  a  favourable  outlook this month. The employment outlook index by  sector  showed  that  the services  sector  (28.7 points) indicates the highest prospects for creating jobs, followed  by industrial  (26.4 points), wholesale/retail trade (25.0 points) and construction (16.7 points) sectors,” it said.

The surveyed firms identified insufficient power supply (63.6 points), high interest rate (59.9 points), unfavourable economic climate (52.7 points), financial problems (50.4 points), unclear economic laws (49.5 points), insufficient demand (47.9 points) and unfavourable political climate (46.0 points) as the major factors constraining business activity during the review period.

“Majority of the respondent firms expect the naira to appreciate in the current and next months as the confidence indices stood at 29.5 and 44.6 points, respectively. Respondent firms expect inflation rate to fall in both the current and next months, with confidence indices of -7.8 and -13.2 points for the current and next months, respectively,” it said.

Similarly, respondent firms expect borrowing rates to rise in both the current and next months, as the confidence indices stood at 1.6 and 3.1 points, respectively.