Private-Sector Credit Falls N10.31 Trillion in Seven Months, CBN Data Shows

Nigeria's private-sector credit dropped by N10.31 trillion between January and July 2026, according to money and credit statistics published by the Central Bank of Nigeria (CBN). The figures show credit fell from N93.74 trillion at the start of the year to N83.43 trillion by July, a decline of about 11% across the seven months.

The contraction came even as banks raised fresh capital, raising questions about how quickly that money is reaching businesses.

What the CBN numbers show

Credit briefly climbed to N94.61 trillion in February before dropping sharply to N80.5 trillion in April. It then recovered partially, rising to N81.04 trillion in May, N83.2 trillion in June, and N83.43 trillion in July.

On a year-on-year basis, however, credit to the private sector was still 9.21% higher than the N76.72 trillion recorded in July 2025. That suggests the contraction is concentrated within 2026 rather than part of a longer downward trend.

Private-sector credit covers loans, trade credits, and other financing support that banks extend to businesses and private borrowers.

Recapitalisation has not yet translated into cheaper loans

The decline follows a period of heavy investment in the banking sector, during which 33 lenders raised a combined N4.65 trillion under the CBN's recapitalisation programme. Despite this, access to affordable credit remains a challenge for many businesses.

President Bola Ahmed Tinubu addressed the issue directly at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria. He called on banks to channel more funds into productive economic activity rather than prioritising profits and shareholder returns.

Tinubu said: "A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit, manufacturers struggle to finance expansion, and millions of productive MSMEs remain outside the formal financial system."

Why lenders are pulling back

Financial expert Prof. Adebayo Adams said the fall in credit figures does not mean banks have stopped lending altogether. He described the trend as a shift in how banks are managing their loan portfolios, driven by concerns about non-performing loans and broader economic uncertainty.

Adams said: "It is not necessarily that banks are no longer lending. It is more of a portfolio shift."

He pointed to high borrowing costs as a key reason businesses, particularly manufacturers, are pulling back from taking on new credit.

Adams said: "Factories cannot expand at this cost of borrowing. Businesses are struggling with financing costs, and that is one of the reasons private-sector credit has fallen."

He cautioned that if the trend continues, it could dampen production, reduce investment, and slow job creation.

For Nigerian businesses, the numbers point to a financing squeeze that capital injections alone have not solved. Until lending rates ease, many firms may keep postponing expansion plans, with knock-on effects for output and hiring.