The Central Bank of Nigeria (CBN) has disclosed in its Credit Conditions survey report for the fourth quarter of 2017 that banks in the country recorded increased default on credit card and overdraft loans to households in the fourth quarter of 2017. The report showed that while banks approved more unsecured loans to households during the quarter, they however, reduced the limit on credit card loans during the quarter.
The report stated: “Despite lenders’ resolve to tighten the credit scoring criteria for total unsecured loan applications in the review quarter, the proportion of approved total loan applications for households increased. Lenders expect to still loosen the credit scoring criteria in the next quarter, but anticipated that the total loans applications to be approved in Q1 2018 will rather decrease.
“The proportion of approved credit card loans increased in Q4 2017 despite the lenders’ stance on the credit scoring criteria for granting credit card loans. However, the proportion of approved overdraft/personal loans applications decreased.
“The limit on unsecured credit cards on approved new loan applications decreased in Q4 2017 and was expected to decrease further in the next quarter. The minimum proportion of credit card balances to be paid on approved new loan applications increased in the review quarter, and was expected to further increase in the next quarter.