Nigerians Hold N5.19 Trillion Cash Outside Banks as Cash Usage Defies Digital Payment Growth
Nigeria’s push toward a cashless economy continues to face strong resistance, as new data shows that Nigerians are still holding a massive N5.19 trillion outside the banking system as of May 2026. The figures highlight the deep-rooted preference for cash transactions despite years of aggressive digital payment expansion by financial institutions and regulators.
According to the Central Bank of Nigeria (CBN) Latest Money and Credit Statistics, currency outside banks rose from N5.08 trillion in April to N5.19 trillion in May, marking an increase of N109.34 billion or 2.15% within just one month. On a yearly basis, the value climbed by over N559 billion compared to May 2025, showing that cash usage is still growing rather than shrinking.
The report also revealed that currency in circulation increased slightly to N5.69 trillion in May 2026, while bank reserves fell sharply by N840.77 billion to N33.76 trillion during the same period. This suggests tighter liquidity within the formal banking system even as more money continues to circulate outside regulated financial channels.
A deeper breakdown shows that cash outside banks accounted for 91.27% of total currency in circulation, meaning more than nine out of every ten naira in circulation is held by individuals, businesses, and informal sector operators rather than deposited in banks. Although slightly lower than the 92.40% recorded a year earlier, the figure underscores how deeply cash remains embedded in everyday economic activities across Nigeria.
Despite the dominance of digital payments through mobile banking, fintech platforms, agent banking, and instant transfers, cash remains the backbone of retail trade, transport, and informal commerce. The Central Bank of Nigeria has set an ambitious target under its Payment System Vision 2028 to reduce cash outside the banking system to below 40%, with plans to expand QR-code and tap-to-pay infrastructure nationwide.
source: nairametrics