In its recent money and credit statistics for July 2014, the Central Bank of Nigeria (CBN) disclosed that credit by banks to the private sector increased year-on-year by N288bn to N17.252trn, compared to the N16.964trn it stood at the end of June 2014.
The increase is an indication of the rise in the banking system credit to the private sector by a total of N483bn in the last two months, compared to the Nn16.769trn it was at the end of May 2014.
The Apex bank also reported that there may be further rise in the credit due to the implementation of the N220bn micro, small and medium enterprises (MSME) fund.
On assumption of seat, the central bank Governor, Mr. Godwin Emefiele said developmental initiatives would be deployed to create an enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development.
According to the Governor, individual companies would not be the target but rather specific sectors. Credit allocations and direct interventions in key sectors of the economy, such as power, agriculture, MSME, oil and gas, and health were included in CBN’s developmental list.
The recent data also revealed that currency outside banks increased from N1.162trn in June to N1.237trn in July.
Also, the sum up of currency-in-circulation which was N1.497trn in June appreciated to N1.568trn at the end of July. On the other hand, the total amount of banks’ reserves with the central bank declined to N3.199trn in the month under review, from N3.266trn in June.
Demand deposits, which are funds held in account from which deposited funds can be withdrawn at anytime without any advance notice to the depository institution increased from N5425trn in June, to N5.508trn in the month under review.
The broad money (M2) which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts, according to the data appreciated year-on-year to N16.425trn in July from N15.928trn in the previous month. Similarly, narrow money (M1), which includes all physical monies such as coins and currency along with demand deposits and other assets held by the central bank increased year-on-year to N6.745trn as at July, up from the N6.587trn recorded in June.
Quasi money, which is made up of highly liquid assets that can easily be converted to cash increased from N9.341trn in June, to N9.680trn in July, just as Net Foreign Assets climbed from its previous month’s value of N7.693trn to N8.031trn. Net Domestic Assets also climbed marginally to N8.394trn in July, from N8.235trn the previous month.