CBN data shows lending climbed 8.74% year-on-year despite tight monetary policy, while government credit fell sharply in July……
Credit extended to Nigeria’s private sector rose by about N2.84 trillion between April and July 2026, signalling a gradual expansion in bank lending to businesses and other private-sector borrowers despite the Central Bank of Nigeria’s tight monetary policy stance.
Latest data from the Central Bank of Nigeria (CBN) showed that private sector credit increased from N80.59 trillion in April to N83.43 trillion by July.
The movement represents a 3.52 percent increase over the three-month period, although the pace of lending was uneven, with most of the growth concentrated between May and June.
On an annual basis, private sector credit rose by N6.70 trillion, or 8.74 percent, from N76.72 trillion recorded in July 2025.
The CBN figures showed private sector credit rising steadily at the beginning of the period, moving from N80.59 trillion in April to N81.04 trillion in May.
Lending then jumped to N83.26 trillion in June before edging higher to N83.43 trillion in July.
The largest monthly expansion occurred between May and June, when private sector credit increased by approximately N2.22 trillion.
That momentum slowed considerably in July, with credit growing by only about N171.80 billion, equivalent to 0.21 percent from the June level.
The latest CBN database does not contain a figure for March 2026, meaning April represents the earliest available point for measuring the three-month increase.
The database also does not provide a sector-by-sector breakdown of private sector credit for the period under review.
The increase in private sector lending came as overall net domestic credit moved lower during July.
CBN data showed that net domestic credit declined to N117.35 trillion in July from N123.29 trillion in June, representing a reduction of about N5.94 trillion, or 4.82 percent.
Credit extended to the government also fell sharply during the month, dropping from N40.03 trillion in June to N33.92 trillion in July.
The contrasting movements suggest that while lending to businesses and other private-sector borrowers continued to expand, credit to the public sector contracted significantly during the same period.
Although the latest CBN data does not provide the sectoral distribution of private sector credit for April to July, figures contained in the apex bank’s first-quarter 2026 statistical bulletin provide some insight into how lending was distributed across major areas of the economy.
Lending to the oil and gas sector, however, declined from N10.91 trillion in January to N10.58 trillion by March.
Manufacturing also recorded a reduction in credit, with lending to the sector falling from N6.57 trillion in January to N5.77 trillion in March.
Other sectors recorded stronger growth during the same period.
Credit to power and energy increased from N1.30 trillion to N1.61 trillion, while real estate lending rose from N4.67 trillion to N6.29 trillion.
Trade and general commerce also recorded increased access to credit, reaching N6.29 trillion in March.
Meanwhile, lending to the finance, insurance and capital market sector climbed to N9.80 trillion.
The increase in private sector credit comes against the backdrop of the CBN’s continued tight monetary policy.
At its July 2026 Monetary Policy Committee meeting, the apex bank retained the Monetary Policy Rate at 26.50 percent, alongside other key monetary policy parameters.
The decision reflected the CBN’s continued emphasis on containing inflation and maintaining macroeconomic stability, while keeping an eye on the impact of high interest rates on economic activity.
Despite the restrictive policy environment, the latest figures indicate that demand for credit from businesses and private-sector borrowers remained resilient.
The CBN had earlier reported that demand for corporate and secured loans increased in the second quarter of 2026, as banks expanded credit availability and recorded lower default rates across major lending categories.
The broader lending picture, however, remains uneven across the real economy.
The Manufacturers Association of Nigeria recently raised concerns over declining bank credit to manufacturers, with lending to the sector falling by N1.92 trillion from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
CBN data showed that outstanding consumer credit fell by 19.89 percent to N3.78 trillion in 2025 from N4.72 trillion in the preceding period, marking the first decline in consumer credit since December 2019.
Private-sector groups have consequently continued to urge the apex bank to reconsider further monetary tightening.
The Centre for the Promotion of Private Enterprise and other operators have warned that additional interest rate increases could undermine the pace of economic recovery while putting further pressure on businesses and households.
The increase in private sector credit coincided with continued expansion in Nigeria’s broad money supply.
Nigeria’s broad money supply, known as M3, rose to N138.78 trillion in July 2026, representing a 16 percent year-on-year increase from N119.89 trillion recorded in July 2025.
Taken together, the latest figures point to a financial system in which liquidity and private-sector lending are expanding even as monetary policy remains restrictive.
The key challenge for businesses, however, is whether the increase in the volume of available credit will translate into more affordable financing capable of supporting investment, production and expansion across the real economy.
