Customers repaying more on loans and receiving less on deposits from commercial banks, a Central Bank of Nigeria (CBN) report declared.
They paid between 15.01 per cent and 30.70 per cent on loaned out funds but the interest paid on their term deposits fallen by 1.46 per cent to 6.27 per cent, the CBN’s economic report for the first quarter of the year shows.
The average prime and maximum lending rates rose by 0.02 per cent point and 0.47 per cent point, respectively, to 15.01 per cent and 30.70 per cent, the report released at the weekend. The percentage directly above their levels in the previous quarter.
The average prime and maximum lending rates put up at 29.98 per cent and 14.99 per cent individually in the fourth quarter of last year.
The rising lending rates, analysts said, have led to increasing burden on market rates and cost of production for the manufacturing sector.
The CBN detected that in spite of the rise in lending rates, banks paying less deposit interest to depositors. The average term deposit rate fell by 1.46 percentage points to 6.27 per cent. The spread between the average term deposit and average maximum lending rates widened by 1.93 per cent points to 24.43 per cent points.
The margin indicated that customers are paying 24.43 per cent higher fee than they are getting from banks.
However, the Monetary Policy Rate (MPR), which is the benchmark for interest rate at which the CBN lends to the commercial banks, is currently at 12.5 per cent.
Despite the rise in lending rates, CBN Governor, Godwin Emefiele said aggregate domestic credit (net) grew by 5.16 per cent in June 2020 compared with 7.47 per cent in May 2020.
