Credit to Nigeria’s private sector stood at N76.27 trillion in March 2025, reflecting a marginal increase of 0.03% from the N76.25 trillion recorded in February 2025.
This is according to the latest data released by the Central Bank of Nigeria (CBN).
However, the figure still trails the N77.38 trillion recorded in January 2025, indicating a broader trend of credit tightening amid prevailing economic conditions.
The decline from January to March 2025, which represents a cumulative drop of N1.11 trillion, highlights the cautious stance adopted by financial institutions in response to evolving macroeconomic dynamics, including the CBN’s monetary policy tightening, rising interest rates, and inflationary pressures.
According to the Money and Credit Statistics published by the apex bank, the slow credit growth in the private sector may reflect concerns about elevated non-performing loans (NPLs), weak consumer demand, and a challenging business environment that has made banks more risk-averse.
Sectoral Breakdown and Implications
While the CBN did not release the detailed sectoral credit breakdown for March, earlier figures suggest that the bulk of credit allocation continues to flow into the manufacturing, general commerce, and oil and gas sectors.
In the apex bank’s Economic Report for January 2025, CBN stated, “In terms of sectoral distribution, the services sector maintained the largest share at 54.87 per cent, followed by the industry sector at 40.02 per cent, while the agriculture sector accounted for 5.11 per cent. Notably, the share of the agriculture sector was higher than the 4.82 per cent recorded a month earlier.”
Economic analysts attribute the tepid credit expansion to both demand- and supply-side constraints.
On the demand side, businesses are increasingly reluctant to borrow due to the high cost of funds, while on the supply side, banks are tightening lending criteria due to perceived credit risks and limited access to long-term funds.
The decline in credit to the private sector from January to March 2025 coincides with the CBN’s hawkish monetary stance and its stringent attempt to curb inflation and stabilize the naira.
Analysts say the benchmark MPR rate, currently at 27.5%, may have made borrowing more expensive, thus affecting the private sector’s appetite for credit.
What This Means
Slower growth in private sector credit could weigh on investment, job creation, and overall GDP growth, especially in a country where the private sector accounts for a large share of economic activity.
While the federal government has introduced some intervention schemes, including the recently launched Nigerian Consumer Credit Corporation, their impact appears limited in the face of broader monetary tightening.
Stakeholders in the financial sector are calling for targeted reforms to improve access to credit for productive sectors and MSMEs, including credit guarantees, regulatory incentives, and improved risk-sharing frameworks.
