Nigeria’s private sector credit fell sharply in early 2026, even as monetary authorities eased policy.
Credit dropped from ₦94.61 trillion in February to ₦80.59 trillion in April 2026, erasing over ₦14 trillion within two months, according to the Central Bank of Nigeria.
The bank skipped March data, which created a gap in reporting.
Credit Contraction Deepens
Meanwhile, banks reduced lending activity across the economy, despite improved liquidity conditions.
As a result, credit growth weakened instead of expanding after policy easing.
Year-on-year, credit still showed mild improvement.
It stood at ₦78.07 trillion in April 2025, slightly below current levels.
However, momentum faded after the February peak.
Net domestic credit also fell from ₦133.97 trillion in February to ₦120.18 trillion in April.
In addition, other assets dropped from ₦20.75 trillion to ₦11.88 trillion, as banks actively reshaped their balance sheets.
Liquidity Remains Trapped In System
At the same time, liquidity remained stable.
Net domestic assets rose from ₦97.55 trillion to ₦100.97 trillion, as funds circulated within the banking system.
Read Also: Liquidity Surge Pushes Nigeria’s Money Supply To ₦124.99Tn
However, banks channelled fewer funds into lending.
Earlier, in February 2026, the Central Bank of Nigeria cut the Monetary Policy Rate from 27% to 26.5%.
It also retained key policy ratios, including a 45% Cash Reserve Ratio for commercial banks.
Policy Easing Meets Weak Response
Nevertheless, credit did not respond strongly to easing.
Instead, analysts linked the weak response to inflation pressure, exchange rate volatility, and banks’ preference for government securities.
Furthermore, the Centre for the Promotion of Private Enterprise warned that structural weaknesses continue to restrict credit to manufacturing, agriculture, and small businesses.
Finally, broad money supply (M3) rose from ₦123.12 trillion to ₦124.99 trillion.
Liquidity expanded, yet lending to the real economy declined, widening the financing gap.<!-
