Private sector credit in Nigeria started the year on a softer note, as banks reduced lending in January.
Private Sector Credit Slows In January
Data from the Central Bank of Nigeria show that banks extended ₦75.24 trillion in credit to the private sector in January 2026, down from ₦75.83 trillion in December 2025.
Private sector credit includes loans, non-equity securities, trade credit and accounts receivable.
Banks and financial institutions provide these funds to businesses and households to support economic activity.
However, the latest figures show that banks cut lending by ₦590 billion within one month, reflecting cautious credit conditions at the start of the year.
Meanwhile, a year-on-year comparison shows weaker lending activity.
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Banks extended ₦77.38 trillion in credit in January 2025, higher than the level recorded in January 2026.
Lending Trends Remain Volatile
Credit trends during 2025 also reveal fluctuations in lending activity.
Banks increased credit to a peak of ₦78.07 trillion in April 2025 before lending declined in the following months.
Subsequently, credit fell to a 12-month low of ₦72.53 trillion in September 2025, highlighting volatility in credit conditions.
In addition, the slowdown in private sector lending also appeared in broader credit indicators across the economy.
Banks reduced Net Domestic Credit (NDC) to ₦109.43 trillion in January 2026, compared with ₦110.06 trillion in December 2025.
Similarly, banks slightly reduced net credit to the government to ₦34.19 trillion in January, from ₦34.22 trillion in December.
Policy Shift Shapes Credit Outlook
At the same time, Nigeria’s broad money supply (M3) declined to ₦123.36 trillion in January 2026, down from ₦124.4 trillion in December 2025.
Consequently, lower liquidity may partly explain the decline in overall credit levels.
Meanwhile, these figures follow recent policy adjustments by the Central Bank of Nigeria aimed at balancing inflation control with economic growth.
Earlier, in September 2025, the Monetary Policy Committee cut the Monetary Policy Rate (MPR) by 50 basis points to 27%, signalling a cautious shift towards monetary easing.
