Bank credit to manufacturers drops by N1.9 trillion, MAN raises alarm
By Aboki Forex —
The Manufacturers Association of Nigeria (MAN) has raised fresh concerns after bank credit to the sector fell by N1.92 trillion. The credit dropped from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
MAN disclosed this in a statement signed by its Director-General, Segun Ajayi-Kadir, on Tuesday. The trade group also lamented the high cost of borrowing. It warned that manufacturers are being priced out of access to credit as commercial lending rates climb above 35%.
According to MAN, the 22.5% contraction in credit shows mounting financial pressure on manufacturers. This comes at a time when businesses are already dealing with high energy costs, foreign exchange volatility, and rising production expenses.
High lending rates hurt industrial expansion
MAN described the prevailing lending rates as a major obstacle to industrial expansion and economic diversification. The association noted that despite the Central Bank of Nigeria's recent reduction of the Monetary Policy Rate (MPR) to 26.5%, manufacturers still face average prime lending rates of 27%. Maximum lending rates at some commercial banks have reached 35.6%.
According to MAN, these rates make it nearly impossible for manufacturers to secure financing for long-term investments, capacity expansion, and technology upgrades. “The primary barrier between manufacturers and financial bank liquidity is the exorbitant cost of borrowing,” the association stated.
Manufacturing lags behind other sectors
MAN noted that manufacturing recorded one of the steepest declines in credit allocation among key sectors during the period under review. While lending to manufacturers fell to N6.61 trillion, the oil and gas sector attracted N10.59 trillion in bank credit. The finance sector received N9.24 trillion.
MAN argued that the trend shows lenders prefer sectors offering quicker returns. This leaves productive industries struggling to access the capital needed for growth.
Monetary policy and bank behaviour blamed
Beyond high interest rates, MAN blamed the situation on stringent monetary policies and the risk-averse posture of commercial banks. According to the association, the Cash Reserve Ratio (CRR) remains as high as 45% to 50% for some banks. This has significantly reduced the amount of funds available for lending to the real sector.