In its determination to grow the nation’s economy and make funds available to its customers to meet their business needs, Guaranty Trust Bank (GTBank) Plc has announced a reduction in the interest rate for a set of credit facility it offers.
The lender, in a notice to its customers on Tuesday, said it has reduced the interest rate for the loan obtained under its QuickCredit package to 1.33 percent monthly from the previous 1.75 percent.
According to the financial institution reputed to support retail businesses, especially those in the Micro, Small & Medium Enterprises (MSME) sector, the new interest rate was derived from 16 percent per annum.
In the notice sighted by Business Post, GTBank stated that customers who wish to apply for the Quick Credit loan offering should “simply dial *737*51*51#.”ALSO READ Union Bank Rakes N93.4b In Nine Months
“We are pleased to inform you that the interest rate on QuickCredit is now 1.33% monthly. This means that the effective interest rate on Quick Credit is now 16% per annum,” it said.
Last year, the Central Bank of Nigeria (CBN), which regulates the banking sector in the country, pushed banks to offer loans to their customers, giving them the percent of their deposits that should be given out to support the economy.
In July 2019, the CBN gave banks in the country till September 30, 2019 to increase their loan to deposit ratio 60 percent and after the expiration, 12 lenders were fined nearly N500 billion.
According to the CBN, the 12 affected lenders had their fines deducted from their Cash Reserve Requirement (CRR) domiciled with it (CBN). The CRR is a portion of the banks’ deposits kept with the CBN for regulatory reasons.ALSO READ Ecobank Quotes N12.53b Commercial Papers on FMDQ
After the first deadline elapsed, the apex bank raised the LDR to 65 percent and gave all the banks till December 31, 2019 to meet up or be fined.
“All DMBs are required to attain a minimum LDR of 65 percent by December 31, 2019 and this ratio shall be subject to quarterly review to encourage SMEs, retail, mortgage and consumer lending, these sectors shall be assigned a weight of 150 percent computing the LDR for this purpose,” a circular from the CBN had said.
This year, the central bank has retained the LDR at 65 percent after the expiration of the second deadline last month, saying it has noticed remarkable increase in the size of gross credit by deposit money banks (DMBs) to customers.ALSO READ OMD Worldwide Earns Recognition at Cannes Lions 2017
“Accordingly, the CBN has decided to retain the minimum 65 percent LDR in the interim. All DMBs are required to maintain this level and are further advised that average daily figures are to be applied to assess compliance going forward,” the apex bank said.
However, it stressed that, “DMBs (Deposit Money Banks) are further encouraged to maintain strong risk management practices regarding their lending operations.”