Banking Sector Lending Hits N111.4trn

With banks now adequately funded following the recapitalisation exercise that ended last month, lending to both the government and the private sector rose slightly in February, reaching the highest level since November 2024.

According to the latest credit figures released by the Central Bank of Nigeria (CBN), the Nigerian banking industry’s lending to the domestic economy rose from N109.42 trillion in January to N111.39 trillion in February, a 1.8 per cent increase.

This was the highest level of credit to the domestic economy since November 2024 when the total credit to the economy was N115.57 trillion. Year on year, net domestic credit had risen by 7.8 per cent from N103.36 trillion in February 2025.

A breakdown showed that the increase in net domestic credit was mainly due to a rise in credit to the government, which rose from N34.18 trillion in January to N35.77 trillion in February. This also represented the highest figure since November 2024 when credit to the government stood at N39.61 trillion.

Compared with N27.11 trillion in February last year, credit to the government had risen year on year by 24.2 per cent. Credit to the private sector continued to dominate total net domestic credit, rising slightly from N75.24 trillion in January to N75.62 trillion in February.

Year on year, credit to the private sector had declined slightly by 0.8 per cent from N76.25 trillion in February last year. Having commended the CBN for an orderly, non-disruptive and confidence-enhancing recapitalisation exercise, the chief executive of the CPPE, Dr Muda Yusuf, noted that SME credit in Nigeria accounts for only about one per cent of total credit, lower than the average of about five per cent in sub-Saharan Africa.

Pointing out that this “represents one of the most significant weaknesses in Nigeria’s financial architecture”, he stressed that “priority must shift from capital adequacy to economic impact. Nigeria needs not just stronger banks, but banks that work for the economy.”

Meanwhile, currency outside the banking sector continued to decline after it reached an all-time high in December last year.

According to CBN data, cash outside the banking system rose to an all-time high of N5.4 trillion in December 2025.

Currency outside the banking halls had declined to N5.21 trillion January before further dropping to N5.20 in February 2026. Compared to N4.51 trillion which it was last year February, currency outside banks rose by 15.3 per cent.