The Central Bank of Nigeria (CBN) has reported that bank credit to Nigeria’s private sector dipped to N75.83tn in August 2025, representing the lowest disbursement by the banks to the sector this year.
The apex bank in its latest Money and Credit Statistics report indicated that the August credit to the private sector was a 0.4 per cent decline from N76.14tn in June 2025.
The figures, however, showed that on a year-on-year basis, the August 2025 credit was 1.5 per cent higher than the N74.73tn recorded in August 2024
Also, the net domestic credit stood at N98.97tn in August 2025, lower than N99.86tn in June and below the N105.88tn recorded in August 2024.
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A further analysis of the CBN statistics showed that on month-on-month basis, reflected that the banks gave 77.38tn credit to the private sector in January this year, N76.26tn in February and N75.98tn in March. In April, the lenders loaned the private sector N78.08tn in April, N77.83tn in May, N76.14tn in June, and N75.83tn in the month under review.
In the first half of the year alone, private sector credit declined by about N1.9tn due to high interest rates and tight liquidity in the banking system.
The drop in private sector credit over the months showed the tighter monetary policy stance of the apex bank, which for most part of this year retained the Monetary Policy Rate (MPR) at 27.5 per cent to moderate inflation and the volatility of the Naira in the foreign exchange rate market
The persistent contraction in credit has been eliciting comments from economic analysts, most of who advocated the need for the CBN to moderate its hawkish policy stance of the past months in order to boost liquidity and by implication the nation’s economic growth.
In what reflected the CBN management’s response to the agitations, its Monetary Policy Committee (MPC) in September cuts the MPR to 27 per cent sequel to the easing inflation, which stood at 20.12 per cent in August, and the need to stimulate growth.
Similarly, the committee also reduced the Cash Reserve Ratio (CRR) for commercial banks from 50 to 45 per cent, while tightening rules on public sector deposits by raising their reserve ratio to 75 per cent.
Also, bank lending to the public sector has been low over the past months, with total credit to the government totalling N23.13tn in August 2025, slightly down from N23.73tn in June and far lower than the N31.15tn loaned to the sector in August 2024.
