Private Sector Credit Jumps by ₦1.88 Trillion Amid CBN Monetary Policy Ease

Private sector credit rose sharply in October 2025, climbing to ₦74.41 trillion from ₦72.53 trillion in September, according to new data from the Central Bank of Nigeria (CBN).

The ₦1.88 trillion increase represents a 2.60% month-on-month rise, the strongest positive movement recorded in 2025.

This rebound followed the Monetary Policy Committee’s (MPC) decision in September 2025 to cut the Monetary Policy Rate (MPR) by 50 basis points to 27%, marking the first policy rate reduction since 2020. The cut came as inflation began to ease and FX market conditions stabilised.

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At the November meeting, the MPC kept the MPR at 27% but adjusted the corridor around the rate to discourage banks from parking excess liquidity with the CBN, signalling a cautious stance on inflation and liquidity management.

Year-on-year, private sector credit showed only marginal improvement, rising from ₦74.07 trillion in October 2024 to ₦74.41 trillion in October 2025, an increase of ₦0.34 trillion or 0.46%. This indicates that while private credit has returned to its year-earlier level, the dominant story is the short-term recovery triggered by the September rate cut.

Private Credit Trends in 2025: A Choppy Pattern

Throughout 2025, private sector credit moved erratically rather than expanding consistently. It opened the year at ₦77.38 trillion, dipped to ₦76.26 trillion in February and ₦75.98 trillion in March, before rebounding to ₦78.07 trillion in April.

From May through June, credit declined again, falling to ₦77.97 trillion in May and ₦76.13 trillion in June. After hovering around ₦75.88 trillion in August, it dropped sharply to ₦72.53 trillion in September — a ₦3.36 trillion decline (-4.42%).

The October recovery of ₦1.88 trillion does not fully offset September’s slump, but it marks a clear turning point after months of weak or negative momentum.

Despite rising nominal prices and incomes, real private sector credit has likely been squeezed for much of 2025. The October increase therefore represents a rebound from a relatively depressed base.

Private Sector Now Drives Nigeria’s Domestic Credit

Nigeria’s total domestic credit rose from ₦96.69 trillion in September to ₦99.20 trillion in October 2025 — a ₦2.51 trillion (2.60%) month-on-month increase.

The private sector accounted for 75% of total credit in October (₦74.41 trillion), while government credit made up 25% (₦24.79 trillion). This ratio is consistent with September’s composition.

The structure has shifted significantly since October 2024, when the private sector represented 65.3% of total credit and the government 34.7%. The change is driven by a steep decline in credit to government.

Year-on-year, total domestic credit dropped from ₦113.46 trillion in October 2024 to ₦99.20 trillion in October 2025, a fall of ₦14.26 trillion (-12.57%). This entire decline reflects the sharp contraction in government credit, which fell by ₦14.60 trillion over the period. Private sector credit, in contrast, rose slightly by ₦0.34 trillion.

Of the ₦2.51 trillion total credit increase in October 2025, the private sector contributed ₦1.88 trillion (75%), while government borrowing added ₦0.63 trillion (25%).

With interest rates cut in September and held in November, the dynamics between private-sector credit demand and government borrowing will shape liquidity conditions, monetary expansion, and inflation trends moving into 2026.