Manufacturing firms borrowed a total of N822.50 billion from Zenith Bank last year as an excellent risk management strategy underpinned asset quality.
That represents a 46.70 percent increase from 2020’s N560.64 billion. These loans include those granted to Flour Mills of Nigeria, Beverages and Tobacco, and Cement Manufacturing, according to data gathered by MoneyCentral.
The manufacturing loans of N822.50 billion represents 23.50 percent of the total loan portfolio of N3.50 trillion.
Analysts attribute the uptick in credit to the manufacturing sector to the central bank’s loans to deposit ratio rules that forced lenders to extend loans to the real sector of the economy.
However, stakeholders still bemoan high lending rates they claim discourages productivity in the sector, a triple whammy for an industry beset by inflationary pressures, foreign exchange scarcity, supply chain bottlenecks, decrepit infrastructure.
Nigerian banks credit to the private sector hit its highest level in December 2021, reaching N35.73 trillion from N30.15 trillion recorded as of December 2020, representing a N5.58 trillion increase in one year, according to data from the Central Bank of Nigeria (CBN).
With an excellent risk management strategy and efficient allocation of portfolio across sectors, Zenith Bank’s Non-Performing Loans (NPLs) of 4.19 percent in 2021 is lower than the 5 percent regulatory threshold.
The Group adopts a complete and integrated approach to risk management that is driven from the Board level to the operational activities of the bank.
“Risk management is practiced as a collective responsibility coordinated by the risk control units and is properly segregated from the market facing units to assure independence,” said the Bank.
“The process is governed by well defined policies and procedures that are subjected to continuous review and are clearly communicated across the group. There is a regular scan of the environment for threats and opportunities to improve industry knowledge and information that drives decision making,” said the bank.