In just eight months, Nigerian construction and real estate companies were able to obtain loans totaling N2.26 trillion.
Their increased service capabilities in the industry have been made possible by these bank loans.
PUNCH claims that the loans, which were obtained from November 2022 to June 2023, had grown significantly, rising from N1.90 trillion to N2.26 trillion—a remarkable 18.9 percent increase.
The Central Bank raised the benchmark interest rate in June of this year from 11.5 percent, which was the rate it was observed earlier in the year, to a greater 18.75 percent, making this financial upswing noteworthy.
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The central bank used this eight-pronged increase in interest rates as part of a plan to fight inflation and remove excess liquidity from the system.
According to the Central Bank of Nigeria’s most recent Sectoral Analysis of Deposit Money Banks’ Credit, the real estate industry was successful in obtaining a sizeable loan of N755 billion.
Concurrently, the construction sector has secured an even more remarkable N1.51 trillion credit facility. According to CBN data, real estate companies have increased their borrowing from N712 billion to N755 billion, a phenomenal 44.4 percent rise.
In a similar vein, loans to construction industries increased from N1.19 trillion to N1.51 trillion in the same period. From a monthly perspective, loans totaling N1.80 trillion were received in December, and these were followed by loans totaling N1.78 trillion in January, N1.82 trillion in February, N1.84 trillion in March, N1.88 trillion in April, and N1.84 trillion in May.
Undoubtedly, the country’s economy has suffered from the hike in the benchmark interest rate, which has made the ongoing housing problem worse. As a result of this policy change, investors are now more cautious due to the continuous increase in real estate values.
