The National Bureau of Statistics has reported that Microfinance Banks in Nigeria recorded an 82 percent boost in lending in 2020.
This is rising from N300.2 billion lending in 2019 to N546.6bn.
According to NBS, microfinance loans to the private sector was N250bn in 2018, but has doubled in two years.
The report attributed this to improved technology, easier processing of loans, better loan recovery methods, increased competition, and a growing class of employees with an appetite for short-term credit.
Some analysts now regard this as the fastest-growing credit segment in the financial lending space.
The data also stated that commercial and merchant banks on the other hand recorded a 12.4% increase in credit to the private sector while primary mortgage banks recorded a 35.1% increase.
Also, Non-interest banks such as Islamic banking recorded a 57.9% spike in lending.
According to data at the Central Bank of Nigeria, there are over 900 MFBs with state, regional, and national licenses. However, this increase might be linked to the CBN Targeted Credit Facility (TCF) of N150bn disbursed last year.
CBN Governor, Godwin Emefiele recently disclosed that “So far, N149.21bn has been disbursed to 316,869 beneficiaries and as a result, has decided to double this fund to about N300bn, in order to accommodate many more beneficiaries and boost consumer expenditure which should positively stimulate the economy.”