Private sector credit climbs to N83.3trn as banks expand lending despite high interest rates

CREDIT to Nigeria’s private sector rose to N83.3 trillion in June 2026, reflecting continued lending to businesses and households despite elevated borrowing costs under the Central Bank of Nigeria’s (CBN) tight monetary policy.

Data from the CBN’s latest Money and Credit Statistics showed that private sector credit increased by 2.8 percent month-on-month from N81 trillion recorded in May, indicating sustained appetite for financing across the economy.

In contrast, credit to the government fell by 0.99 percent to N40 trillion in June from N40.4 trillion in the preceding month, even as the Nigerian government continues to rely on borrowing to finance its N23.85 trillion budget deficit.

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The movement in both categories pushed net domestic credit higher by 1.5 percent to N123.3 trillion in June, compared with N121.42 trillion in May.

The increase in lending to the private sector suggests banks remained willing to finance economic activities despite the CBN’s benchmark interest rate of 26.5 percent. Stronger access to credit could support business expansion, investment and consumer spending if the trend is sustained.

“When you fund businesses, you trigger economic growth, job creation and social cohesion,” said a financial analyst, Dr Emeka Amaegbunam.

However, economists note that rapid credit expansion also has implications for inflation, particularly if growth in lending exceeds the economy’s capacity to produce goods and services, potentially adding to existing price pressures.

The latest figures also underscore the resilience of credit demand, with businesses and households continuing to seek financing despite the prevailing high-interest-rate environment introduced by the CBN to tame inflation and maintain macroeconomic stability.