The average prime lending rate in Nigeria’s banking sector increased to 18.88 per cent in August 2025 from 18.54 per cent in July 2025 as banks adjust to the recent reduction of Monetary Policy Rate (MPR) to 27 per cent by Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).
The 18.88 per cent average lending rate in August 2025 is the highest so far this year attributable to easing in inflation, improving macro-economic indicators, and the CBN moves to stimulate lending and economic activity (especially in agriculture, manufacturing, and small/medium enterprises).
Prime lending rate is the interest rate commercial banks operating in Nigeria charge their most creditworthy and financially stable customers, usually large corporations or top-rated borrowers.
Prime lending rate is determined by banks’ cost of funds & risk assessment and inflation & liquidity conditions in the economy.
MPR remained stable at 27.5 per cent from January to July 2025, it declined slightly to 27 per cent in August 2025. The average prime lending rate has fluctuated between 17.96 per cent and 18.88 per cent, showing small month-to-month movements even though MPR was mostly constant so far in 2025.
