Defaults of unsecured loans to household and small businesses during the third quarter worsened and is expected to continue in the fourth quarter of this year, the Central Bank of Nigeria has said.
The regulator disclosed this in the third quarter Credit Conditions Survey Report, seen by THE WHISTLER.
The apex bank said the performance of total unsecured loan to households, measured by default rates, worsened in the third quarter of 2020 and it is expected to deteriorate further in the fourth quarter of 2020.
The CBN noted that Corporate loan performance rates also worsened for small businesses.
The CBN said lenders expect a decrease in the rate of default for all firm sizes except small business in the the next quarter.
For secured loan, the CBN said the default rate reduced, signaling a positive performance during the quarter under review.
It said banks expect higher default rate for secured loans in the fourth quarter.
The Central Bank revealed that the availability of secured credit to households rose in the third quarter and will further increase in the fourth quarter.
Also the regulator said banks and other financial institutions reported that the availability of unsecured credit to households decreased in the third quarter.
Banks according to the apex bank expects an improvement on economic outlook as unsecured loans will rise by next quarter.
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