Cash Outside Banks Climbs to N5.19 Trillion Despite CBN’s Aggressive Digital Payment Drive
Nigeria’s transition to a cashless economy continues to face significant hurdles as cash held outside the banking system climbed to N5.19 trillion in May 2026, according to the latest figures released by the Central Bank of Nigeria (CBN). The development highlights the enduring reliance on physical cash by millions of Nigerians despite ongoing efforts to accelerate digital payment adoption across the country.
Data from the CBN’s Money and Credit Statistics report revealed that currency outside banks increased by N109.34 billion from N5.08 trillion recorded in April. On a year-on-year basis, the figure rose by N559.16 billion from N4.63 trillion in May 2025. The increase means that more than nine out of every ten naira in circulation remain outside the formal banking sector, reflecting the dominant role cash still plays in daily economic activities.
The report further showed that cash outside banks accounted for 91.27 per cent of total currency in circulation in May, up from 90.03 per cent in April. While digital banking platforms, mobile money services, fintech solutions and agent banking networks have expanded rapidly in recent years, cash remains the preferred medium of exchange in retail markets, transportation services, informal businesses and many rural communities across the country.
Meanwhile, total currency in circulation rose moderately to N5.69 trillion in May from N5.65 trillion in April, representing a monthly increase of N43.59 billion. At the same time, banking system liquidity weakened as reserves held by deposit money banks with the apex bank declined by N840.77 billion to N33.76 trillion. Although reserves fell on a monthly basis, they remained significantly higher than the N30.87 trillion recorded during the same period last year.
The growing volume of cash circulating outside the banking system underscores the challenge facing policymakers as they seek to deepen financial inclusion and build a technology-driven payments ecosystem. Speaking at the launch of the Nigeria Payment System Vision (PSV) 2028 in Abuja, CBN Governor Olayemi Cardoso reaffirmed the bank’s commitment to reducing cash outside banks to below 40 per cent of total currency in circulation. To achieve this goal, the CBN plans to deploy more than 10 million QR-code and tap-to-pay acceptance points across markets, transport hubs, commercial centres and rural communities nationwide, a move expected to further accelerate Nigeria’s digital payments revolution.
source: The guardian