is written for a period of less than five years and is not fixed by the duration of a credit agreement; and since the 2014 recession, financial institutions have been reluctant to extend credit facilities. Commercial banks, in particular, have taken a conservative approach to increasing their lending commitments. Banks` portfolio of non-performing loans has steadily increased due to a greater number of customers/borrowers in arrears in the payment of their debts and repayments of facilities. For example, in February 2019, the National Bureau of Statistics reported that NOTLs in Nigeria were valued at about N2.4 trillion in the fourth quarter of 2017, with gross loans worth about N15.9 trillion. This had narrowed in the fourth quarter of 2018 to about N1.79 trillion against gross loans worth about 15.4 trillion. Therefore, the circular is part of the CBN`s policy to encourage risk-taking by national banks. . . .

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