Thursday, April 11, 2019 1:32PM / CBN

Supply

The availability of secured credit to householdsincreased in Q1 2019 and was expected to increase in the next quarter.Improving economic outlook was the major factor for the increase in securedcredit.

Lenders reported that the availability of unsecuredcredit to households increased in Q1 2019, but it is expected to contract in Q22019. Most lenders adduced higher appetite for risk for this increase.

The overall availability of credit to the corporatesector increased in Q1 2019 and was expected to increase in the next quarter.Market share objectives was the major factor contributing to the increase.

Demand

Demand for secured lending for house purchasedecreased in Q1 2019, but more lenders expect demand for secured lending toincrease in the next quarter. The proportion of loan applications approvedincreased even though lenders tightened the credit scoring criteria.

Demand for total unsecured lending from householdsincreased in Q1 2019, and was expected to increase in the next quarter. Despitelenders’ resolve to leave the credit scoring criteria unchanged, the proportionof approved unsecured loan applications decreased in the current quarter but isexpected to increase in the next quarter.

Lenders reported increased demand for corporate creditfrom all firm sizes in Q1 2019. They also expect increased demand from all firmsizes in the next quarter.

Defaults

Secured loan performance, as measured by defaultrates, improved in the review quarter, and lenders still expect lower defaultrates in the next quarter.

Total unsecured loan performance to households, asmeasured by default rates, deteriorated in Q1 2019 but is expected to improvein the next quarter.

Corporate loan performance improved across all sizesof firm in the current quarter. Lenders generally expect lower default ratesfor all firm sizes in the next quarter.

Loan pricing

Lenders reported that the overall spreads on securedlending rates on approved new loans to households relative to MPR remainedunchanged in Q1 2019, and was expected to narrow in the next quarter.

The overall spreads on unsecured lending widened in Q12019 but were expected to remain unchanged in the next quarter.

Changes in spreads between bank rates and MPR onapproved new loan applications narrowed for all business sizes in Q1 2019, butwas expected to widen for all firm sizes in the next quarter.

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