Credit extended to Nigeria’s private sector by deposit money banks declined by N1.3 trillion over the past year, reflecting the combined impact of aggressive monetary tightening and rising borrowing costs, even as short-term fluctuations show businesses continue to rely heavily on bank financing.
Analysis of latest data from the Central Bank of Nigeria (CBN) showed that total credit to the private sector stood at N75.96 trillion in November 2024.
But as of November 2025, the credit representing the amount of borrowing to the private sector by banks stood at N74.63 trillion, representing a marginal increase from N74.41 trillion recorded in October 2025.
The contraction in private sector credit coincided with an aggressive tightening cycle by the CBN under the leadership of Governor Olayemi Cardoso, as inflation climbed to 34.6 per cent in November 2024.
Since Cardoso assumed office, the apex bank has implemented six interest rate hikes in 2024, raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points. An analysis of CBN data shows sharp swings in private sector credit during the year.
