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Information communication and technology (ICT) companies have borrowed about N982.87 billion from banks as at March 2022, the Central Bank of Nigeria (CBN) has revealed. Banks gave out N952.06 billion in January 2022 to ICT companies, a significant rise of over 25% increase to underscore the industry’s pulsating growth and increasing trust of financial players in ICT companies.
Steady rise risks industry confidence
As the CBN’s credit report indicates, loans to ICT firms totaled N952.06 billion in January, N973.51 billion in February, and N982.87 billion in March. A steady rise in both risks undertaking and industry confidence for a sector that helped to speed up Nigeria’s post COVID recovery accounting for over 17% contribution to its GDP and early exit from recession.
The ICT sector is benefiting from a 2022 new push by the CBN to get the banking sector increase access to finance and credit for households, small medium businesses (SMBs) and ICT firms.
“The policy focus of the bank for 2022 is with a pledge to sustain improved access to finance and credit for households and businesses, mobilise investment to boost domestic productivity, enable faster growth of non-oil exports, and support employment generating activities,” said CBN’s governor Godwin Emefiele.
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Telcos turn to banks for infrastructure financing
ICT companies notably telcos have increasingly turned to banks for infrastructure financing.
In 2019, MTN Nigeria announced a deal with a consortium of eight banks to secure a seven-year medium term N200 billion loan facility to boost its Nigerian operations.
The loan syndication came from banks that included Access Bank, Guaranty Trust Bank, Zenith Bank, Fidelity Bank, First City Monument Bank, United Bank for Africa and First Bank of Nigeria.
According to the Nigerian Communications Commission (NCC), telcos need hefty funding for buildout and nationwide rollout of broadband infrastructure.
