Nigeria’s private sector credit rose 2.6% in October, rebounding from September’s 18-month low.
The Central Bank cut interest rates for the first time in five years, encouraging banks to lend more to businesses.
Private Sector Credit Rebounds
Consequently, bank reserves fell 8.9% to ₦31.58 trillion, signalling that funds flowed into the economy.
In September, the 50-basis-point rate cut lowered borrowing costs as inflation declined to 16% for the seventh consecutive month.
In November, the CBN kept rates steady but widened the Monetary Policy Rate (MPR) corridor.
Monetary Policy Supports Lending
This adjustment encouraged liquidity flow without triggering aggressive monetary easing.
FMDA analysts said cheaper access to CBN funds will likely boost private sector lending further.
Liquidity And Economic Outlook
The Standing Deposit Facility (SDF) rate dropped from 24.5% to 22.5% to discourage idle deposits.
Read Also: MPR Soars To 27% As CBN Tightens Policy, Growth At Risk
Similarly, the Standing Lending Facility (SLF) fell to 27.5%, motivating commercial banks to borrow and extend credit.
Money supply (M3) increased 1.1% to ₦119.04 trillion, reflecting modest liquidity growth in October.
Although Net Foreign Assets declined 16.5%, domestic credit expanded strongly, supporting economic activity.
Credit to government rose to ₦24.79 trillion, continuing the public sector’s borrowing trend.
Analysts explained that corridor adjustments support investment and productive activity while maintaining anti-inflation goals.
Overall, October marks a turning point, as banks resume backing private investment after months of caution.
Therefore, private sector lending is expected to remain active through November and December, potentially boosting economic growth.
