The Lagos Chamber of Commerce and Industry (LCCI), yesterday, said the Central Bank of Nigeria (CBN) new lending policy will intervene to normalise the credit markets, spur economic growth and broaden the interface between entrepreneurs and the banking system.
Amehnews recall that the CBN recently released the new lending policy for Deposit Money Banks (DMBs) which prescribes a minimum Loan Deposit Ratio (LDR) of 60 per cent, effective from September 30, 2019.
In a statement reviewing the policy and signed by its Director General, Muda Yusuf, LCCI lauded the proposed lending regime as it focuses on Small and Medium Enterprises (SMEs), retail, mortgage and consumers.
Muda explained that under the new policy, the quality of financial intermediation would be improved and that it would impact the economy better as funding gaps in many sectors were addressed thereby reducing crowding of the private sector in the credit market.
LCCI Boss further explained that under the new regime there would be an improvement in purchasing power as consumer credit increased. This, he said would also impact positively on the economy because of the stimulating effect on aggregate demand, a higher probability of a reduction in interest rate as the supply of credit increased, improvement in lending creativity and innovation by banks.
In order to address some of the possible downside risks in respect of loans asset quality arising from the new lending policy, LCCI implored the apex regulatory body to strengthen the Collateral Registry to enhance the profiling of borrowers in the banking system.
