Nigerian banks extended N75.24 trillion in credit to the private sector in January 2026, marking a decline of about N590 billion from N75.83 trillion in December 2025, according to the latest monetary and credit statistics from the Central Bank of Nigeria (CBN).
The drop reflects ongoing tight lending conditions, even as the CBN has signaled a gradual shift toward easing after years of aggressive tightening to combat inflation. Private sector credit encompassing loans, trade credits, non-equity securities, and accounts receivable to businesses and households remains below peak levels seen earlier in 2025, when it hit N78.07 trillion in April before trending lower.
On a year-on-year basis, lending was also weaker compared to **N77.38 trillion** in January 2025, underscoring persistent volatility and a measured approach by financial institutions amid economic uncertainties.
The broader picture showed similar restraint: net domestic credit eased to N109.43 trillion from N110.06 trillion, while net credit to government dipped slightly to N34.19 trillion. Broad money supply (M3) contracted to N123.36 trillion from N124.4 trillion, pointing to continued liquidity tightening that may be constraining overall credit expansion.
These figures come against a backdrop of recent Monetary Policy Committee (MPC) adjustments aimed at striking a balance between inflation control and growth support. In September 2025, the MPC cut the Monetary Policy Rate (MPR) by 50 basis points to 27%, a cautious step away from prolonged hikes. While the rate was held steady in November, tweaks to the interest rate corridor were introduced to discourage banks from parking excess funds at the CBN and encourage more lending to the real economy. Key ratios Cash Reserve Ratio at 45% for commercial banks, Liquidity Ratio at 30%, and the standing facilities corridor remained unchanged.
The credit slowdown has sparked fresh concerns among business owners. At the Nigerian Economic Summit Group’s (NESG) recent monthly meeting, medium-scale entrepreneurs highlighted the acute shortage of affordable credit and questioned the federal government’s allocation priorities for private businesses, arguing that limited access is stifling expansion and job creation in key sectors.
Speaking passionately on the issue, renowned development economist and entrepreneur Ifeanyi Akudike criticized the persistent information gap that hinders investors and businesses alike. He described it as a widespread challenge in Nigeria, where potential funders often lack clear, reliable channels to connect with viable medium-scale enterprises. Akudike stressed the urgent need to bridge this disconnect through better information flows and structured platforms that match businesses with willing investors. He revealed he is actively collaborating with undisclosed stakeholders to develop solutions aimed at closing that gap and unlocking much-needed capital for growth-oriented firms.
Analysts view the January dip as part of a cautious banking environment, where institutions remain wary of risk amid lingering inflationary pressures and forex dynamics. While policy signals point toward eventual easing, the data suggests lending to the private sector has yet to rebound meaningfully.
As Nigeria navigates its recovery path, the interplay between monetary adjustments, credit availability, and private sector confidence will remain critical. Business leaders and policymakers alike are calling for faster progress in channeling funds to productive areas to support sustainable economic momentum.
