Private Sector Credit Down 2.8% YoY to N75.24trn as Lending Weakens

Nume Ekeghe

Credit to Nigeria’s private sector declined by about 2.8 per cent year-on-year to N75.24 trillion in January 2026, reflecting softer lending conditions to businesses and households amid tight financial conditions.

Latest monetary and credit statistics released by the Central Bank of Nigeria (CBN) showed that private sector credit fell from N77.38 trillion recorded in January 2025, representing a decline of about N2.14 trillion over the 12-month period.

On a month-on-month basis, lending to the private sector also weakened, dropping by 0.8 per cent from N75.83 trillion in December 2025, indicating a contraction of roughly N593 billion within the period.

Private sector credit, which comprises loans, non-equity securities, trade credits and accounts receivable extended by banks and other financial institutions to businesses and households, had earlier peaked at N78.07 trillion in April 2025 before gradually trending downward in subsequent months.

Within the period under review, the lowest level of lending to the private sector was recorded in September 2025 at N72.53 trillion, before recovering moderately towards the end of the year.

Meanwhile, credit to government stood at N34.19 trillion in January 2026, slightly lower than the N34.22 trillion recorded in December 2025, suggesting a marginal decline on a monthly basis.

However, on a year-on-year basis, government borrowing from the domestic financial system rose significantly, increasing from N25.03 trillion in January 2025, representing a growth of about 36.6 per cent within the 12-month period.

The data also showed that Net Domestic Credit declined to N109.43 trillion in January 2026, compared with N110.06 trillion in December 2025, reflecting the moderation in overall lending within the financial system.

Similarly, broad money supply (M3) eased to N123.36 trillion in January, down from N124.4 trillion in December, indicating a slight contraction in liquidity conditions.

The moderation in credit growth comes as the Monetary Policy Committee (MPC) of the CBN continues to balance efforts to tame inflation with the need to support economic growth.