Banks’ domestic lending grows to 11% MoM
By Jeph Ajobaju, Chief Copy Editor
Domestic lending by banks grew to N84 trillion in June, a 11 per cent rise month-on-month (MoM) from N75.49 trillion in May, gleaned from the Money and Credit Statistics of the Central Bank of Nigeria (CBN).
The data shows the private sector received N52.8 trillion loans, about 17.9 per cent higher than the N44.78 trillion obtained in May.
Credit to the government jumped 1.6 per cent to N31.2 trillion June, from N30.7 trillion the previous month.
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Currency-in-circulation rises
The CBN report said currency-in-circulation (CIC) rose 4.0 per cent MoM from N2.5 trillion in May to N2.6 trillion in June, per reporting by Vanguard.
The rising trend also reflected in currency outside banks which grew 4.15 per cent from N2.17 trillion in May.to N2.26 trillion in June.
Both CIC and currency outside banks have been on the increase since February when the Supreme Court ordered the CBN to retain old N200, N500, and N1,000 notes as legal tender until 31 December 2023.
Currency the CBN releases into circulation is meant to be spent, and after a period of time, it returns to the CBN to enable the bank keep the volume in circulation under its firm control.
The recovered about N1.9 trillion recovered into its vaults when it implemented the naira redesign policy, leaving about N900 billion in circulation in February.
Banks ramp up N120b USSD debt, telcos threaten to end service
Telecom firms have threatened to end Unstructured Supplementary Service Data (USSD) platform because of N120 billion debt owed them by banks whose customers use the channel for electronic transactions.
The debt reached N100 billion in the first quarter of 2023 (Q1 2023) and the Association of Licensed Telecoms Operators of Nigeria (ALTON) Chairman Gbenga Adebayo said banks failed to pay up, which increased the debt to N120 billion.
“Discussions are ongoing, we have regulatory intervention by both the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) at a very high level. Some of the banks are paying while others seem waiting until service is withdrawn in an attempt to test our resolve to get them to pay,” he disclosed in May.
“If this CBN/NCC intervention fails, we will withdraw USSD service from debtor banks at some points. The outstanding now is in the region of N120 billion and no sector can survive the magnitude of rising debt.
“The banks have a moral obligation because these are services for which money has been deducted from their customers.”
The debt has mounted for over five years.
A fee of N6.98 has been charged per USSD transaction since 16 March 2021 as agreed by the Ministry of Communications and Digital Economy, CBN, and NCC
The agreement said the new USSD charges would be collected on behalf of mobile network operators (MNOs) directly from customers and banks would not impose additional charges on customers for the use of the channel.
Before the N6.98 per transaction regime, a typical USSD session lasting 20 seconds cost ₦4.98.
A statement jointly signed by the NCC and CBN on the N6.98 fee said: “This replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.
“This approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.”
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