Private Sector Credit Falls ₦14trn Despite CBN Rate Cut
Private sector credit dropped sharply by over ₦14 trillion in just two months, falling to ₦80.59 trillion in April 2026 from a peak of ₦94.61 trillion in February 2026, despite the Central Bank of Nigeria’s (CBN) decision to ease monetary policy.
The CBN’s latest data revealed the contraction, though figures for March were not published, leaving a gap in the reporting cycle.
On a year-on-year basis, credit remained above the ₦78.07 trillion recorded in April 2025, showing lending activity is still higher than last year’s levels.
However, net domestic credit fell to ₦120.18 trillion in April from ₦133.97 trillion in February, while other assets (net) dropped to ₦11.88 trillion from ₦20.75 trillion, reflecting major adjustments in banking sector assets.
Interestingly, net domestic assets rose to ₦100.97 trillion in April from ₦97.55 trillion in February, indicating liquidity remained strong within the banking system even as lending weakened.
The decline comes amid concerns about Nigeria’s credit structure, particularly for manufacturing, agriculture, and small businesses, which rely heavily on private sector financing.
At its 304th Monetary Policy Committee (MPC) meeting in February 2026, the CBN cut the Monetary Policy Rate (MPR) by 50 basis points to 26.5%, while retaining the Cash Reserve Ratio (CRR) at 45% for commercial banks and 16% for merchant banks. The Liquidity Ratio stayed at 30%.
Analysts say the modest rate cut had limited impact due to macroeconomic uncertainties, high borrowing costs, exchange rate pressures, and banks’ preference for government securities.
The Centre for the Promotion of Private Enterprise (CPPE) warned that structural weaknesses in Nigeria’s credit system continue to restrict financing for productive sectors.
Meanwhile, Nigeria’s broad money supply (M3) rose to ₦124.99 trillion in April 2026 from ₦123.12 trillion in February, highlighting concerns that liquidity is not flowing efficiently into productive economic activities.