Central Bank of Nigeria (CBN), has said that default on loans with collateral worsened in the fourth quarter of 2020.
The statistics department of the CBN disclosed this in its fourth quarter ‘Credit condition survey report’.
“Secured loan performance, measured by default rates, worsened in Q4 2020, while lenders expect default rates in Q1 2021 to remain unchanged,” it stated.
It however noted that the performance of total unsecured loan to households, measured by default rates, improved in Q4 2020 and was expected to improve further in Q1 2021.
According to the report, the availability of secured credit to households increased in Q4 2020 and was expected to increase in the Q1 2021.
Changing economic outlook and increased market objectives were major factors responsible for the increase in supply of secured credit.
Lenders reported that the availability of unsecured credit to households increased in Q4 2020, and it was expected to increase in Q1 2021.
Most lenders cited improving economic outlook and increased market share objective as contributory factors for the increase.
