Nigerian Private Sector Credit Slides to N75.24 Trillion in January 2026 Amid Tight Lending Conditions

Nigerian banks’ lending to the private sector dipped to N75.24 trillion in January 2026, down from N75.83 trillion in December 2025, the Central Bank of Nigeria (CBN) reported. The decline, though modest, signals a cautious start to the year for private sector financing. Credit to the private sector includes loans, trade credits, non-equity securities, and accounts receivable extended by banks to businesses and households.

A year-on-year comparison shows the sector is still below its peak lending levels of 2025. In January 2025, private sector credit stood at N77.38 trillion, while the highest point in 2025 was N78.07 trillion in April. Fluctuations in credit conditions continued throughout the year, with a 12-month low of N72.53 trillion in September, highlighting ongoing volatility in Nigeria’s lending environment.

The slowdown in private sector credit coincided with a broader contraction in domestic credit and money supply. Net Domestic Credit (NDC) dropped to N109.43 trillion in January from N110.06 trillion in December, while net credit to the government eased slightly to N34.19 trillion. Nigeria’s broad money supply (M3) also declined to N123.36 trillion from N124.4 trillion, reflecting tighter liquidity in the financial system.

The CBN’s recent policy moves may explain part of this cautious lending trend. The Monetary Policy Committee (MPC) reduced the Monetary Policy Rate (MPR) by 50 basis points to 27% in September 2025 and adjusted the interest rate corridor to encourage banks to lend to the real sector. The apex bank also maintained the Cash Reserve Ratio at 45% for commercial banks and 16% for merchant banks, alongside a 30% liquidity ratio, signaling a careful balance between stimulating growth and controlling inflation.

Despite these measures, the latest data indicate that banks remain measured in their lending to private businesses and households. Analysts say this cautious approach underscores the need for sustained policy support to boost private sector credit and stimulate broader economic growth, especially as Nigeria navigates ongoing liquidity constraints and global economic uncertainties.

source: nairamerics