Demand for credit by household increases in Q2 2020
The request for secured lending of credit by households for House purchase have increased from 0.0 to 3.0 by second quarter of 2020 (Q2). Lenders expect demand for such lending to decrease in Q3 2020.
This was disclosed in the recently published Central Bank of Nigeria’s Credit Conditions Survey Report for Q2. The proportion of secured loan applications approved decreased as lenders tightened the credit scoring criteria.
For Q2 2020, households’ demand for all lending types increased, but in Q3 2020, only prime and other lendings to households were expected to increase while buy to let lending would decrease. Household demand for consumer loans rose in Q2 2020 and it is expected to rise in Q3 2020. However, demand for mortgage/remortgaging from households fell in Q2 2020 and expected to further decline in Q3 2020.
Demand for Unsecured Credit
Demand for unsecured credit card lending from households increased in Q2 2020 from 4.9 recorded in Q1, 2020 to 7.6 in Q2, 2020, and a further increase is expected in Q3 2020. Similarly, demand for unsecured overdraft/personal loans from households increased in Q2 2020 and is expected to further increase in Q3 2020.
Demand for total unsecured lending from households increased in Q2 2020 and is expected to increase in the Q3 2020. Lenders’ resolve to tighten the credit scoring criterion decreased the proportion of approved unsecured loan applications in Q2 2020.
Demand for Corporate Credit
Lenders reported increased demand for corporate credit from all firm sizes in Q2 2020 and expect demand to rise further in Q3 2020.
Demand for corporate lending increased for all business sizes in Q2 2020 and would further increase in Q3 2020. The increase in the demand for corporate credit in Q2, 2020 is attributable to increase in inventory finance. Similarly, inventory finance and capital investment were expected to drive demand in Q3 2020.