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.