{"id":78016,"date":"2022-12-15T17:55:33","date_gmt":"2022-12-15T16:55:33","guid":{"rendered":"https:\/\/www.africa-press.net\/nigeria\/uncategorized\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn"},"modified":"2022-12-15T19:33:47","modified_gmt":"2022-12-15T18:33:47","slug":"economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn","title":{"rendered":"Economic miseries behind surge in loan defaults \u2013 Experts to CBN"},"content":{"rendered":"

Africa-Press – Nigeria. <\/strong><\/span>Economic experts have said that inflation, energy cost and foreign exchange challenges are pushing manufacturers and businesses into insolvency, non-profitability and the inability to repay loans offered by the Central Bank of Nigeria, CBN, and other institutions.<\/p>\n

The CBN had disclosed that manufacturers and industrialists received over N9.7 trillion loan interventions in the period under review. Despite the interventions to revamp businesses, the apex bank decried the surge in the rate of bad loans across the country.<\/p>\n

CBN appealed to Nigerians that loans should not be seen as grants but rather as a facility that needs to be repaid.<\/p>\n

The CBN said this in its retreat for the development Finance Department on Monday.<\/p>\n

As of September 30, 2022, Nigeria\u2019s total debt stock rose to N44.06 trillion against N42.84 trillion in the prior Month, according to the Debt Management Office.<\/p>\n

In the first quarter of this year, commercial banks\u2019 Non-performing Loan, NPL, stood at 4.95 per cent after granting customers N27.31 trillion in loans in the same period. This is coming on the heels of the country\u2019s economic crisis heightened by inadequate revenue sources and an increasing debt repayment burden.<\/p>\n

But, experts have attributed the increased default rate of bank loans to the overbearing economic challenges that business owners and Nigerians face daily.<\/p>\n

Speaking with DAILY POST on the development, a financial inclusion\/wealth management expert, Mr Idakolo Gbolade said inflation, energy and foreign exchange shortage are the reason for the increased loan default rates by business owners and manufacturers.<\/p>\n

He said, \u201cThe CBN loans to manufacturers have helped them to keep up production in this very harsh operating environment, but various factors like energy cost, inflation and foreign exchange challenges could affect profitability and ability to consistently repay the loans.<\/p>\n

\u201cThe CBN intervention to the sector alone cannot lift the economy looking at various extraneous factors affecting production in the country like security, increasing poverty that has lowered purchasing power, unfriendly operating environment and stiff competition from imported products which are very important factors affecting the manufacturing sector.<\/p>\n

\u201cThe Federal government needs to look at these mitigating factors if we want the manufacturing sector to be profitable enough to repay loans granted by the CBN\u201d, he said.<\/p>\n

Also, a don of Accounting and Financial Development at Lead City University, Ibadan, Prof Godwin Oyedokun, said CBN\u2019s loan interventions are cosmetic as long as the root cause of Nigeria\u2019s economic challenges remains unaddressed.<\/p>\n

Oyedokun said if care is not taken, more businesses will slip into bankruptcy in the near future.<\/p>\n

\u201cWith Nigeria\u2019s harsh economic realities, the situation is expected because most businesses struggle to stay afloat. The operational cost now outweighs the profit margin in many cases, affecting businesses\u2019 ability to repay loans.<\/p>\n

\u201cHow do you want a business barely surviving to repay loans? This period is tough for most investments in Nigeria, as many have been forced to shut down. Except Nigeria addresses the root cause of inflation, insecurity, foreign exchange scarcity, high energy cost among others, the Central Bank of Nigeria interventions through loans are merely cosmetic and would only shun out defaulters\u201d, he stated.<\/p>\n

For More News And Analysis About Nigeria<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Nigeria. Economic experts have said that inflation, energy cost and foreign exchange challenges are pushing manufacturers and businesses into insolvency, non-profitability and the inability to repay loans offered by the Central Bank of Nigeria, CBN, and other institutions. The CBN had disclosed that manufacturers and industrialists received over N9.7 trillion loan interventions in […]<\/p>\n","protected":false},"author":84,"featured_media":78015,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[1570,2140,503,254],"class_list":["post-78016","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-nigeria-2","tag-cbn","tag-nigeria"],"yoast_head":"\nEconomic miseries behind surge in loan defaults \u2013 Experts to CBN - Nigeria<\/title>\n<meta name=\"description\" content=\"Economic experts have said that inflation, energy cost and foreign exchange challenges are pushing manufacturers and bus ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economic miseries behind surge in loan defaults \u2013 Experts to CBN\" \/>\n<meta property=\"og:description\" content=\"Economic experts have said that inflation, energy cost and foreign exchange challenges are pushing manufacturers and bus ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\" \/>\n<meta property=\"og:site_name\" content=\"Nigeria\" \/>\n<meta property=\"article:published_time\" content=\"2022-12-15T16:55:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-15T18:33:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/nigeria\/sites\/3\/2022\/12\/postQueueImg_1671114338.05.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Economic miseries behind surge in loan defaults \u2013 Experts to CBN\",\"datePublished\":\"2022-12-15T16:55:33+00:00\",\"dateModified\":\"2022-12-15T18:33:47+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\"},\"wordCount\":539,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/nigeria\/sites\/3\/2022\/12\/postQueueImg_1671114338.05.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-Nigeria\",\"CBN\",\"Nigeria\"],\"articleSection\":[\"all news\",\"Economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\",\"url\":\"https:\/\/www.africa-press.net\/nigeria\/economy\/economic-miseries-behind-surge-in-loan-defaults-experts-to-cbn\",\"name\":\"Economic miseries behind surge in loan defaults \u2013 Experts to CBN - 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