Banks Disburse N36.4tn to Trade Sector as Rate Cut Sparks Fresh Credit Expectations
Nigerian deposit money banks disbursed N36.39 trillion to the Trade and General Commerce sector between January and September 2025, marking a modest 0.96 per cent increase from N36.05 trillion recorded in the same period of 2024. The figures, sourced from the Central Bank of Nigeria’s Q3 2025 statistical bulletin, show steady but cautious credit expansion despite high borrowing costs and tight monetary conditions.
The data reveals that credit growth was largely driven by stronger lending in the third quarter of 2025. August recorded the highest monthly disbursement at N5.06 trillion, followed by September at N4.85 trillion, while July climbed sharply to N4.51 trillion. This rebound came after a slow start to the year, with January and February posting the lowest figures at N3.48 trillion and N3.54 trillion respectively. On average, banks extended N4.04 trillion monthly in 2025 — slightly above the N4.01 trillion monthly average in 2024.
The lending expansion comes amid a high-interest-rate environment that saw commercial bank lending rates hover around 30 per cent, following the Monetary Policy Rate (MPR) peak of 27.5 per cent. However, a recent decision by the Monetary Policy Committee of the Central Bank of Nigeria to cut rates by 50 basis points to 26.5 per cent has raised expectations of improved credit access for businesses. Analysts say the rate cut signals cautious optimism and could stimulate investment if properly transmitted to borrowers.
Former President of the Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, noted that credit expansion depends heavily on demand dynamics and policy signals. According to him, lower rates serve as an invitation for businesses to borrow and expand, creating multiplier effects across the economy. Members of the Organised Private Sector, including the Lagos Chamber of Commerce and Industry, described the rate cut as a bridge from reform to results, urging stronger private sector lending and infrastructure investment.
Industry leaders, including the Manufacturers Association of Nigeria and the Association of Small Business Owners of Nigeria, say cheaper credit could help firms expand operations, boost production, and create jobs — particularly for SMEs. However, economists at the Centre for the Promotion of Private Enterprise warn that Nigeria’s historically weak policy transmission mechanism may limit the immediate impact of rate cuts. High operating costs, inflationary pressures, exchange rate volatility, and infrastructure deficits remain structural challenges that could dampen lending momentum.
source: punch