Credit to Nigeria’s private sector rose slightly to ₦76.27 trillion in March 2025, representing a 0.03% increase from ₦76.25 trillion in February 2025.
This is based on the latest data released by the Central Bank of Nigeria.
However, the figure remains below the ₦77.38 trillion recorded in January 2025, highlighting a broader trend of credit tightening amid ongoing economic challenges.
The decline from January to March 2025, amounting to a cumulative drop of ₦1.11 trillion, underscores the cautious approach taken by financial institutions in light of shifting macroeconomic conditions.
These include the CBN’s monetary policy tightening, rising interest rates, and inflationary pressures.
The Money and Credit Statistics published by the apex bank suggest that the slow credit growth in the private sector may be due to concerns over elevated non-performing loans (NPLs), weak consumer demand, and a challenging business environment, all of which have made banks more risk-averse.
Although the CBN did not provide a detailed sectoral credit breakdown for March 2025, previous figures indicate that the majority of credit continues to be directed towards 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.”
Analysts attribute the sluggish credit expansion to constraints on both the demand and supply sides.
On the demand side, businesses are becoming more cautious about borrowing due to the high cost of funds, while on the supply side, banks are tightening lending standards in response to perceived credit risks and limited access to long-term funds.
The drop in private sector credit from January to March 2025 aligns with the CBN’s hawkish monetary policy aimed at curbing inflation and stabilizing the naira.
Analysts suggest that the current benchmark MPR rate of 27.5% has likely increased borrowing costs, dampening the private sector’s appetite for credit.
