Private sector credit surged by N1.88 trillion in October 2025, a sharp 2.60 per cent monthly increase that marks the strongest growth of the year, according to Central Bank data.

The N1.88 trillion increase marks a 2.60 per cent month-on-month surge, the strongest growth recorded in 2025.

This surge followed the Monetary Policy Committee’s decision to cut the Monetary Policy Rate by 50 basis points to 27 per cent in September 2025, the first rate reduction since 2020.

At its subsequent November 2025 meeting, the MPC held the MPR at 27 per cent but adjusted the policy corridor to discourage banks from parking funds with the CBN, signaling a cautious approach to liquidity.

Despite the recent monthly surge, year-on-year growth was modest, with credit rising only 0.46 per cent (N0.34 trillion) from October 2024.

This modest annual gain underscores that the real story is not the year-long trend, but the short-term rebound following September’s rate cut. Indeed, the broader trajectory of private sector credit throughout 2025 has been volatile rather than consistently expansionary.

After starting the year at N77.38 trillion in January, it declined over the next two months before recovering sharply in April to N78.07 trillion.

After its April peak, credit levels softened through mid-year, falling to N76.13 trillion in June. They hovered around N75.88 trillion in August before a sharp pre-policy drop to N72.53 trillion in September, setting the stage for the October bounce to N74.41 trillion.

The year began with credit falling by N1.12 trillion (1.45 per cent) between January and February, followed by a smaller dip in March. A strong rebound in April saw a N2.09 trillion (2.75 per cent) surge, pushing the stock above N78 trillion.

However, this recovery was short-lived; a downward trend resumed from April to June, culminating in a sharp N1.84 trillion loss that left the June total of N76.13 trillion below its January starting point, despite inflationary pressures.

The data shows a gap for July, but by August, credit had held relatively steady at N75.88 trillion. The significant movement was a N3.36 trillion (4.42 per cent) slump in September, which directly preceded October’s recovery.

This trajectory indicates that tight monetary conditions suppressed lending for most of the year, with the September rate cut finally triggering a new, though potentially fragile, impulse for credit growth.

While the October surge of N1.88 trillion (2.60%) did not fully offset September’s sharp drop, it unequivocally marks a turning point after months of stagnation and decline.

Furthermore, when adjusted for inflation, private sector credit likely contracted in real terms for most of 2025, meaning the recent recovery is building from a subdued base.

Total domestic credit rose by N2.51 trillion (2.60%) in October 2025 to N99.20 trillion, driven by the surge in private sector lending.

The private sector’s share of this total remained stable at approximately 75 per cent, with government accounting for the remaining 25 per cent.

The composition of domestic credit has shifted significantly over the past year. In October 2024, the private sector’s share was 65.3 per cent compared to the government’s 34.7 per cent.

By October 2025, the private share had risen by nearly 10 percentage points, a change driven primarily by a steep contraction in government borrowing.