The Central Bank of Nigeria’s credit to the private sector marginally increased by 0.03% from the N76.25 trillion recorded in February 2025 to N76.27 trillion in March.
About N77.38 trillion was recorded in January 2025, indicating a broader trend of credit tightening amid prevailing economic conditions.
Latest data released by the apex bank indicates a decline from January to March 2025, which represents a cumulative drop of N1.11 trillion.
It 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.
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.
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.
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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.”
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.
Economic analysts attribute the tepid credit expansion to both demand- and supply-side constraints.
