Banks’ Credit to Manufacturers Declines by 20% to N60.4trn
Nigerian deposit money banks disbursed a total of N60.35tn in credit to the manufacturing sector in the first nine months of 2025, a 20.44 per cent decline from the N75.86tn recorded in the corresponding period of 2024.
An analysis of the Central Bank of Nigeria’s Quarterly Statistical Bulletin for the third quarter of 2025 indicated that lending to manufacturers slowed significantly during the period, reflecting the tight credit conditions the sector faced amid elevated borrowing costs.
Manufacturers have long called for a deeper rate cut that “can meaningfully lower the cost of credit and stimulate real sector investment”, as the apex bank gradually eased the interest rate benchmark.
The data showed that banks extended N60.35tn to manufacturers between January and September 2025, down from N75.86tn in the same period of 2024.
Monthly disbursement in 2025 revealed that January (N8.31tn) and February (N8.03tn) recorded the highest credit allocations to the sector.
On the other hand, September (N7.09tn) and June (N7.09tn) posted the lowest disbursements during the period.
In 2024, however, credit flows were significantly stronger. The highest disbursements were recorded in February (N10.88 tn) and January (N10.02 tn), while the lowest allocations were in September (N8.67 tn) and March (N8.70 tn).
Further analysis showed that the average monthly credit to manufacturers dropped to approximately N6.71tn in 2025, compared to approximately N8.43tn in 2024, signifying the tightening financial conditions that constrained industrial financing.
The 20.44 per cent decline came despite recent monetary policy easing by the apex bank. After maintaining a tight stance for years, the CBN made its first interest rate reduction in five years in 2025, cutting the Monetary Policy Rate by 50 basis points to 27 per cent from a historic high of 27.5 per cent.
In February 2026, the Monetary Policy Committee again reduced the benchmark interest rate by 50 basis points to 26.5 per cent, signalling the start of a gradual easing cycle.
Private sector groups have welcomed the signal which the easing came with while staying cautiously optimistic for a real impact. In an interview, the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, said the interest rate reduction could stimulate the real sector if banks transmit the lower policy rate to borrowers.