Nigeria’s private sector borrowing recorded its strongest monthly expansion in 2025, rising by nearly N1.89 trillion in October, according to the latest money and credit data released by the Central Bank of Nigeria (CBN).
The stock of credit extended to businesses and households jumped from N72.53 trillion in September to N74.41 trillion in October, marking a 2.6% month-on-month increase. The sharp rebound followed the Monetary Policy Committee’s decision in September to lower the benchmark Monetary Policy Rate (MPR) by 50 basis points to 27%, the first rate cut since 2020.
The reduction came as headline inflation showed signs of moderating and pressure on the foreign exchange market eased, giving the apex bank room to ease the tight monetary stance it had maintained for several years.
At its November meeting, the MPC left the rate unchanged at 27% but adjusted the asymmetric corridor to encourage commercial banks to lend to the real economy rather than park excess funds at the CBN’s standing deposit facility.
Despite the impressive monthly gain, annual growth remains modest. Private sector credit stood at N74.07 trillion in October 2024, meaning the year-on-year increase was only N340 billion, or 0.46%. Analysts say this reflects how prolonged high interest rates and liquidity volatility had suppressed lending activity for much of the year.
Throughout 2025, private credit displayed a volatile pattern: starting the year at N77.38 trillion in January, dipping repeatedly through mid-year, hitting a low of N72.53 trillion in September, and then rebounding strongly in October. The September slump of over N3.3 trillion had been the sharpest contraction of the year, making the subsequent October recovery particularly notable.
Private Sector Now Takes Larger Slice of Domestic Credit
Total domestic credit (net claims on government and the private sector) expanded by N2.51 trillion in October to N99.20 trillion. Of this increase, approximately 75% (N1.88 trillion) went to the private sector while the balance supported government financing.
The private sector’s share of total domestic credit has climbed to 75% in October 2025, up from 65.3% a year earlier. The shift is largely explained by a steep N14.6 trillion drop in net credit to the government over the same period, as fiscal authorities relied more on non-bank financing and improved revenue collection.
In contrast, overall domestic credit is down 12.6% from N113.46 trillion in October 2024, highlighting that the decline in government borrowing has more than offset the modest recovery in private lending.
Economists interpret the October figures as early evidence that the September rate cut is beginning to transmit into the real economy, though lending momentum remains fragile. With inflation still elevated and banks maintaining cautious risk postures, sustained private credit growth will depend on further stability in interest rates, exchange rates, and overall liquidity conditions heading into 2026.
The Central Bank will closely watch whether the recent lending impulse gains traction or fades if global funding costs rise or domestic risks re-emerge. For now, the October surge offers the clearest sign yet that Nigeria’s long-awaited monetary easing cycle may finally be unlocking credit flows to businesses and consumers.
