Credit extended by Nigeria’s banking industry to the private sector rose to an all-time high of N94.610 trillion in February 2026. Latest data released by the Central Bank of Nigeria (CBN) showed that private sector credit rose from N93.743 trillion in January 2026, reflecting steady month-on-month expansion as financial institutions continue to deepen exposure to the real economy.
From N76.257 trillion recorded in February 2025, lending to the private sector has expanded by more than N18 trillion over a 12-month period, an indication of improving credit appetite and potentially stronger demand from firms facing inflationary pressures and currency adjustments.
A closer look at 2025 reveals an upward trend punctuated by periods of volatility. Credit peaked at N78.067 trillion in April 2025 before easing slightly to N77.967 trillion in May and declining further to N76.125 trillion in June.
The downward movement persisted into the third quarter, with lending dropping to N76.723 trillion in July and N75.882 trillion in August, before hitting a low of N72.527 trillion in September. Analysts attribute this dip to tighter financial conditions and cautious risk positioning by banks during that period.
However, credit conditions improved in the final quarter of the year. Lending rebounded to N74.411 trillion in October and N74.631 trillion in November, eventually closing December at N75.834 trillion, setting the stage for the strong expansion seen in early 2026.
In parallel, credit to the government has maintained a steady upward trajectory, highlighting continued fiscal financing needs. Government borrowing rose to N39.359 trillion in February 2026, up from N37.867 trillion in January.
This marks a significant increase from N25.029 trillion recorded in January 2025 and N27.111 trillion in February 2025. Although borrowing levels fluctuated through the first half of 2025—falling to N21.662 trillion in June, they resumed an upward climb in the second half of the year.
Government credit rose to N23.691 trillion in July and N22.951 trillion in August, before increasing further to N24.158 trillion in September and N24.787 trillion in October. A sharp acceleration followed, with borrowing jumping to N26.352 trillion in November and rising to N34.221 trillion by December 2025.
The simultaneous rise in private sector credit and government borrowing presents a mixed outlook for Nigeria’s financial system. While increased lending to businesses signals potential support for economic growth, elevated government borrowing could intensify competition for funds, with possible implications for interest rates and credit allocation.
Market watchers note that the sustainability of this credit expansion will depend on macroeconomic stability, inflation trends, and regulatory policy direction in the months ahead.
