Nigeria’s private sector has recorded a sharp contraction in lending, with credit falling by over N14 trillion within just two months. According to the latest Central Bank of Nigeria (CBN) data, total private sector credit dropped from a 12-month peak of N94.61 trillion in February 2026 to N80.59 trillion in April 2026, raising fresh concerns about weakening financial support for businesses.
The decline comes despite the CBN’s decision in February 2026 to ease monetary policy by cutting the Monetary Policy Rate (MPR) by 50 basis points to 26.5%. However, analysts say the impact of the rate cut appears limited, as high borrowing costs, inflation pressures, and a cautious banking environment continue to discourage aggressive lending to the real sector.
Further data from the CBN shows a broader slowdown in credit conditions across the economy. Net domestic credit fell from N133.97 trillion in February to N120.18 trillion in April, while other banking assets also declined significantly. Although liquidity in the system remained relatively high, much of it appears not to be flowing into productive sectors such as manufacturing, agriculture, and small businesses.
Despite the monthly decline, private sector credit is still higher than the N78.07 trillion recorded in April 2025, indicating some year-on-year growth. However, experts warn that banks may be increasingly favoring safer investments like government securities over riskier lending, limiting the real economy’s access to much-needed funding for expansion and job creation.
Meanwhile, Nigeria’s broader money supply (M3) rose to N124.99 trillion in April 2026, highlighting a growing disconnect between liquidity in the financial system and actual credit delivery to businesses. Economic observers say this mismatch underscores structural weaknesses in Nigeria’s credit system that must be addressed to stimulate sustainable growth.
source: nairametrics