Private‑Sector Credit Falls 14% Year‑to‑Date to N81.04 Trillion

Kayode Tokede

Under the Central Bank of Nigeria’s tight monetary policy, credit extended by Nigerian banks to the private sector fell 14 percent, reaching N81.04 trillion in May 2026, down from N93.74 trillion at the start of January 2026.

CBN’s “money & credit statistics” show that private‑sector credit peaked at N94.6 trillion in February 2026; the data do not include March 2026.

Analysts say the decline reflects heightened credit risk, worries about non‑performing loans, broader economic uncertainty, and the appeal of government securities.

Private‑sector credit encompasses loans, trade credits, and other receivables and support extended by banks over a period. The CPS is a global indicator of the banking sector’s balance‑sheet resilience and its contribution to the national economy.

Experts note that banks are positioned to continue expanding lending, thanks to aggressive growth strategies and a supportive regulatory environment.

They agreed that higher private‑sector credit would significantly boost the economy, as a link exists between such credit and economic growth. Multiple studies consistently show that increased bank lending directly raises GDP.

Cordros Capital analysts predict that the trend in private‑sector credit could persist in the coming period.

“We believe the re-enforcement of the CBN’s limit on Deposit Money Bank’s loans-to-deposits macro-prudential ratio will continue to drive the willingness of commercial banks to create risky assets over the short to medium term,” Cordros Capital stated.

CBN's latest figures also show that government credit rose to N40.38 trillion in May 2026, a 6.6 percent increase from N37.87 trillion reported in January 2026.

Finance expert and Vice President of Highcap Securities Limited, Mr. David Adnori, suggested that excess liquidity drove the rise in government credit, noting that banks consistently seek risk‑