Private Sector Credit Shows Early Rebound, Reaching N74.63 Trillion

New data from the Central Bank of Nigeria (CBN) indicates a tentative recovery in lending, with private sector credit rising to N74.63 trillion in November 2025. This follows the Monetary Policy Committee’s (MPC) decision to cut the policy rate in September, marking a potential turning point after months of contraction. The marginal increase from N74.41 trillion in October suggests easing policy signals are beginning to stabilize credit flows to the real economy, even as broader challenges persist.

Monthly Gain Contrasts Annual Decline

CBN figures reveal a month-on-month increase of N220 billion in November. This uptick is attributed to the MPC’s 50-basis-point rate cut in September, which lowered the Monetary Policy Rate (MPR) to 27 per cent. In a subsequent move to encourage lending, the MPC retained this rate in November but adjusted the interest rate corridor, aiming to dissuade banks from parking excess funds with the CBN. However, the recovery remains fragile on an annual basis. Year-on-year, private sector credit declined from N75.96 trillion in November 2024, underscoring the prolonged impact of restrictive monetary policy throughout much of 2025.

From Contraction to Cautious Stabilization

The November rebound interrupts a prolonged decline that saw credit fall from a peak of N77.38 trillion in January to a low of N72.53 trillion in September. This contraction was driven by elevated interest rates, tighter liquidity, and cautious bank lending. The consecutive increases in October and November signal a cautious shift in sentiment among financial institutions and borrowers. Meanwhile, total domestic credit, encompassing both government and private sector lending, also rose from N99.20 trillion to N100.98 trillion month-on-month, though it remains substantially below the N115.58 trillion recorded a year prior.

The sustainability of this nascent recovery will hinge on several factors. Future MPC decisions must carefully balance inflation control with liquidity management. The pace of broader economic activity as Nigeria heads into 2026 will also be critical. While the situation demands careful monitoring, akin to the urgency when troops rescue 21 or when reps raise alarm over security, the current data points to early signs of stabilization in credit creation after a challenging period.