Credit score to Nigeria’s non-public sector fell to N72.5 trillion in September 2025, marking a notable decline from N75.9 trillion recorded in August, regardless of current financial coverage easing by the Central Bank of Nigeria (CBN) geared toward stimulating lending and enterprise development.
That is based on the most recent information revealed by the CBN.
This marks the sixth time this 12 months that lending to companies and people has declined.
Based on the info, credit score to the non-public sector peaked at N78.1 trillion in April 2025. Nevertheless, the downward pattern started earlier within the 12 months, with complete non-public sector credit score dropping from N77.3 trillion in January to N76.3 trillion in February 2025, signaling the beginning of a gradual decline that has persevered in subsequent months.
The downward pattern persevered in March, with non-public sector credit score falling additional to N75.9 trillion. Though there was a short rebound in April to N78.1 trillion, the restoration proved short-lived as credit score ranges declined once more in Might and June 2025.
The CBN didn’t launch information for July 2025.
Nevertheless, the repeated month-to-month declines in 2025 increase considerations over potential liquidity constraints, diminished lending urge for food by banks, or waning credit score demand from the non-public sector amid tight financial circumstances.
Authorities borrowing on the rise
Whereas credit score to the non-public sector dropped, credit score to the federal government elevated to N24.15 trillion in September, up from N22.95 trillion in August — a leap of over N1.2 trillion inside one month.
This displays the federal government’s continued dependence on home borrowing to finance budgetary shortfalls and assist public sector obligations amid weak income efficiency.
Analysts say the sharp distinction between declining non-public sector lending and rising authorities borrowing displays a “crowding-out impact”, the place banks choose to lend to the federal government by treasury devices slightly than to companies, because of the former’s decrease danger and assured returns.
“Banks appear to be extra snug lending to the federal government than to the non-public sector due to the risk-free nature of sovereign devices. Till credit score danger circumstances enhance, the non-public sector will proceed to battle to entry inexpensive financing,” mentioned an Abuja-based economist, Dr. Chika Okafor.
Charge cuts not but translating to actual sector development
The CBN has, in current months, pursued a extra accommodative financial stance, reducing its Financial Coverage Charge (MPR) to 27% to encourage lending and stimulate development amid slowing financial restoration.
Nevertheless, the most recent credit score information means that the affect of those measures is but to be felt in the actual financial system.
Financial consultants argue that structural bottlenecks, excessive inflation, and foreign money volatility have continued to discourage business banks from increasing credit score to the non-public sector. Companies, particularly small and medium enterprises (SMEs), additionally face steep borrowing prices regardless of decrease coverage charges, limiting their means to take a position and broaden operations.
“The CBN’s coverage price cuts are well-intentioned, however transmission into non-public sector credit score is weak attributable to structural inefficiencies within the banking sector. Excessive inflation and foreign exchange instability nonetheless drive up efficient lending charges,” mentioned monetary analyst, Bamidele Akinola.
What this implies
The contraction in non-public sector credit score raises considerations about Nigeria’s near-term development prospects. Non-public companies , which account for an amazing portion of employment and financial exercise, rely closely on credit score to maintain manufacturing, pay wages, and put money into enlargement.
Specialists warn that continued decline in non-public sector lending might sluggish GDP development, undermine job creation, and worsen inflationary pressures by limiting supply-side productiveness.
“With out sturdy credit score movement to productive sectors, the financial system dangers stagnation. Progress pushed solely by authorities borrowing is unsustainable,” famous coverage guide, Dr. Grace Onyekachi.
What it is best to know
At its 302nd assembly in Abuja, the CBN diminished the MPR by 50 foundation factors, bringing it down from 27.5% to 27%.
As well as, the MPC adjusted the uneven hall across the benchmark price to +250/-250 foundation factors, in comparison with the earlier +500/-100 foundation factors.
The Committee retained the Money Reserve Ratio (CRR) for business banks at 45 per cent, whereas that of service provider banks was set at 16 per cent.