Tuesday, March, 3 2026 - Nigerian deposit money banks disbursed a total of N36.39tn in credit to the Trade and General Commerce sector in the first nine months of 2025, amid calls for more credit to the private sector for productive activities and investment in critical infrastructure.
The amount extended by the deposit money banks to the business ecosystem represented a 0.96 per cent increase from the N36.05tn recorded in the corresponding period of 2024.
An analysis of the Central Bank of Nigeria’s quarterly
statistical bulletin for Q3 2025 showed that total credit rose from N36.05tn in
January to September 2024 to N36.39tn in the same period of 2025, reflecting a
modest year-on-year growth driven largely by stronger lending in the third
quarter of 2025.
The data indicated that August 2025 recorded the highest
credit distribution at N5.06tn, followed by September at N4.85tn, while July
witnessed a sharp rise to N4.51tn. The surge marked a strong rebound after a
relatively slow start to the year.
In contrast, January and February 2025 recorded the lowest
credit disbursements at N3.48tn and N3.54tn, respectively, before lending
accelerated from March onward.
For 2024, banks recorded their highest credit disbursements
in February at N4.91tn and January at N4.62tn, reflecting a strong
first-quarter performance.
However, lending moderated significantly mid-year, with July
and August posting the lowest figures at N3.41tn and N3.48tn before a mild
recovery in September.
On average, banks distributed N4.04tn monthly to Trade and
General Commerce between January and September 2025, slightly higher than the
N4.01tn monthly average in the same period of 2024.
Credit extended to businesses has remained on a stable line,
with interest rates as high as 30 per cent from commercial banks. The Monetary
Policy Rate was pegged at a historic high of 27.5 per cent, a move that the
real sector repeatedly decried. The recent decision of the Monetary Policy
Committee to shave off 50 basis points in February eased the benchmark interest
rate to 26.5 per cent and brought some relief to the trade and commerce
ecosystem.
Analysts and members of the organised private sector have
called for more credit to flow to productive private sector activities,
alongside increased investment in critical infrastructure to strengthen the
real sector.
A former Chairman of the Chartered Institute of Bankers of
Nigeria, Prof Segun Ajibola, said credit growth in trade depends largely on
demand dynamics and signals from monetary authorities.
“Many factors influence the push of credit to different
sectors of the economy. One has to be need-oriented and demand-oriented. In
other words, those who need credit must come forward to request from their
bankers,” Ajibola said.
He added, “Dropping rates is an invitation to do more. And
more importantly, it also signals the direction of the economy. When the rate
drops, the monetary authorities and the fiscal authorities are beckoning
operators in the sectors to do more, so that the multiplier effects will help
push the economy to higher growth.”
Members of the Organised Private Sector, including the
Director-General of the Lagos Chamber of Commerce and Industry, Dr Chinyere
Almona, said the rate cut should translate into stronger private sector lending
and infrastructure investment.
“We see the rate cut as a bridge from reform to results. We
want to see more credit to the private sector for productive activities, more
investment in critical infrastructure, government commitment to continued
transparency in the FOREX market, and strong support to building our local
refining capacity,” Almona said.
She added that with firm coordination between monetary and
fiscal authorities, “the Nigerian economy will make good progress towards
achieving a Gross Domestic Product growth rate above five per cent in the short
term.”
Also, the Director of the Manufacturers Association of
Nigeria, Segun Ajayi-Kadir, said the rate cut, though modest, could ease
borrowing costs for businesses if banks pass on the benefits.
“Lower borrowing costs for businesses will allow them to
access cheaper loans, invest more in machinery, expand operations, and increase
working capital. This will increase production capacity, encourage the hiring
of more workers, and expand the performance of Small and Medium Enterprises,”
Ajayi-Kadir remarked.
He stressed that the impact would depend on effective
transmission, controlled inflation, exchange rate stability, and resolution of
structural challenges such as power, logistics, and insecurity.
The President of the Association of Small Business Owners of
Nigeria, Dr Femi Egbesola, said the reduction in the MPR could lower banks’
funding costs and support lending to SMEs and traders. “If these factors align,
we can expect a modest but meaningful rise in credit flowing to productive
sectors,” Egbesola said.
Similarly, the Director of the Centre for the Promotion of
Private Enterprise, Dr Muda Yusuf, warned that weak transmission between policy
rates and lending rates remains a concern.
“We have historically had a very weak transmission mechanism
between the monetary policy rate and the lending rate. Several times in the
past, when we see a reduction in the monetary policy rate, it hardly reflects
in lower lending rates,” Yusuf said.
He added that high operating costs, risk premiums, and
structural bottlenecks continue to constrain lending, urging greater
intervention by development finance institutions to provide longer-term,
lower-cost funding to the real sector.
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