The Central Bank switched up how much it pays banks for parking cash instead of lending it out, and the new rate structure basically punishes lenders who hoard deposits. Banks used to get 250 basis points above or below the benchmark interest rate, but the central bank just widened that gap to plus 50 and minus 450 basis points, which means idle money sitting at CBN vaults gets way less interest.
Bismarck Rewane from Financial Derivatives said the move should push more capital toward businesses because keeping funds locked up at the central bank just became a terrible deal. Private sector credit jumped by almost 2 trillion naira between September and October, which marks the biggest monthly gain this year. Governor Olayemi Cardoso mentioned that microfinance lending grew over 14 percent, and digital credit products reached more than a million small businesses.
Bismarck Rewane from Financial Derivatives said the move should push more capital toward businesses because keeping funds locked up at the central bank just became a terrible deal. Private sector credit jumped by almost 2 trillion naira between September and October, which marks the biggest monthly gain this year. Governor Olayemi Cardoso mentioned that microfinance lending grew over 14 percent, and digital credit products reached more than a million small businesses.
