Nigerian banks have yet to reduce lending rates almost a week after the Central Bank of Nigeria lowered the Monetary Policy Rate by 350 basis points, prompting concerns that borrowers may not see immediate relief from the policy shift.
Governor Olayemi Cardoso announced on 22 September 2026 that the benchmark rate had been cut from 26.5 per cent to 23 per cent—the largest single reduction in nearly two decades. In a note issued after the Monetary Policy Committee meeting, the CBN described the move as an operational recalibration rather than a conventional easing. Officials noted that the previous MPR had become disconnected from market realities, with the interbank rate trading around 22 per cent, well below the official 26.5 per cent benchmark.
Despite expectations of cheaper credit, lending rates across the industry remain high, ranging from about 20 per cent to as much as 46 per cent, depending on customer risk profiles, funding costs and each bank’s pricing model.
Lenders Still Assessing Impact
Checks show that several banks are still evaluating the implications of the rate cut before adjusting loan prices.
A senior official at one Tier-1 bank, who was not authorised to speak publicly, said there are currently no plans to revise lending rates. The only immediate change expected, the source added, is a possible reduction in the benchmark savings deposit rate tied to the MPR—from roughly 8.1 per cent to about 6.9 per cent per annum.
At another Tier-1 institution, a source indicated that any decision on lending rates would be taken by the bank’s Asset-Liability Committee, which manages balance-sheet risk, liquidity and profitability.
A Tier-2 bank official said the lender is adopting a cautious approach and may wait for clearer economic signals. “Stability and sustainability is key for us. We want to make sure there is consistency,” the official said.
An official at a younger-generation bank, Nova Bank, said the institution is still assessing the impact across its books and remains committed to competitive yet responsible lending. Any adjustments, the official noted, would align with sound risk management and prevailing market conditions.
Experts Urge Faster Transmission
Analysts say the policy change should eventually feed through into lower borrowing costs for businesses and households.
Dr Muda Yusuf, Chief Executive of the Centre for the Promotion of Private Enterprise, said the effectiveness of the adjustment would depend on how quickly banks pass the lower benchmark on to customers. He expects lending rates on both new and existing facilities to adjust progressively downwards. Without meaningful transmission, he warned, the broader benefits for investment and economic growth would be limited.
Dr Jerry Igwilo, Chief Executive of Nisela Capital, also anticipates a downward adjustment of roughly 3.5 percentage points, though the exact reduction will vary according to each customer’s risk profile. Better-rated borrowers, he noted, are likely to secure more favourable terms.
Other Policy Parameters Unchanged
In addition to the MPR cut, the Monetary Policy Committee adjusted the asymmetric corridor around the benchmark to +50 basis points and –300 basis points. It retained the Cash Reserve Ratio at 45 per cent for commercial banks and 16 per cent for merchant banks, and left the 75 per cent requirement on non-TSA public-sector deposits unchanged.
For now, the gap between the new policy rate and actual lending rates remains wide, leaving borrowers waiting to see when and by how much banks will begin to ease the cost of credit.
