Credit to Nigeria’s private sector rose sharply in October 2025, climbing to N74.41 trillion from N72.53 trillion in September, according to the Central Bank of Nigeria’s latest money and credit statistics. The N1.88 trillion increase, representing a 2.60% month-on-month growth, marks the strongest single-month rise so far this year, signaling renewed lending activity after months of subdued credit expansion.
The surge followed the Central Bank of Nigeria’s Monetary Policy Committee (MPC) decision in September to cut the Monetary Policy Rate (MPR) by 50 basis points to 27%—the first rate reduction since 2020. Analysts attribute the rebound to easing inflationary pressures and improved foreign exchange conditions, which have encouraged banks to extend more credit to businesses. In November, the MPC opted to maintain the MPR at 27%, but slightly adjusted the corridor to discourage banks from parking liquidity with the central bank, reflecting a cautious approach to monetary management.
Despite the strong monthly performance, the year-on-year increase in private sector credit remained modest. Credit edged up by just N0.34 trillion, from N74.07 trillion in October 2024 to N74.41 trillion in October 2025, a 0.46% rise. This shows that while the stock of private sector credit has broadly returned to last year’s level, the real story is the short-term rebound triggered by the September policy easing.
Private sector credit now dominates Nigeria’s domestic credit landscape. In October, private sector lending accounted for roughly 75% of total domestic credit, up from about 65% a year earlier, as government borrowing declined significantly. Total domestic credit rose from N96.69 trillion in September to N99.20 trillion in October, with private sector lending contributing around N1.88 trillion—or 75%—of the monthly increase.
Economists note that the pattern of credit growth in 2025 has been uneven, with tight monetary conditions and liquidity swings holding back lending for most of the year. The recent jump in October suggests a fragile but important recovery. Looking ahead to 2026, the balance between private sector demand and government borrowing will be key to shaping liquidity, inflation, and overall credit availability in Nigeria.
source: Nairametrics