Nigeria’s banks kept lending through May 2026, pushing total credit to the private sector past the ₦81 trillion mark to a new high in the CBN’s monthly data series.
That might sound like progress, until you consider the environment in which that growth happened: a benchmark interest rate sitting at 26.5%, commercial lending costs stretching as high as 46%, and inflation still ticking upward at 15.93%.
The tension between those two realities is at the center of a growing debate about whether credit growth alone tells you anything meaningful about economic health.
If you run a small business in Lagos or Kano, the headline number may feel disconnected from the borrowing conditions you actually face at your bank’s front desk.
What CBN’s latest credit figures actually show
The latest money and credit statistics from the Central Bank of Nigeria reveal that credit to the private sector reached ₦81.04 trillion in May, up from ₦80.59 trillion in April.
On a year-over-year basis, the ₦81.04 trillion figure represents a 3.9% increase compared with ₦77.97 trillion in May 2025, the CBN data showed.
Net domestic credit, which captures both government and private borrowing, climbed to ₦121.42 trillion from ₦120.18 trillion the previous month, marking a 20.3% annual expansion.
That gap between private credit growth at 3.9% and total domestic credit growth at 20.3% is revealing, because it implies government borrowing absorbed the majority of new lending activity during the period.
Why 26.5% rates haven’t stopped lending growth
At its 305th meeting on May 20, 2026, the CBN’s Monetary Policy Committee unanimously voted to retain the benchmark rate at 26.5%, following a 50-basis-point cut from 27% in February.
Investment banker Tunde Adeyemi told Nairametrics that the hold at least offers businesses and investors some degree of certainty after months of aggressive tightening throughout 2024 and early 2025.
Commercial lending rates still range from 28% to as high as 46%, which means businesses borrowing ₦10 million face annual interest charges that could exceed ₦4.6 million at the top end of that range.
Nigeria’s credit depth trails regional peers by a wide margin
Even at ₦81 trillion, the size of lending to Nigerian businesses remains small relative to the economy’s overall output, the African Development Bank found in its 2026 African Economic Outlook report.
The AfDB placed Nigeria’s private sector credit-to-GDP ratio at just 9.4%, a level the institution described as indicative of a shallow financial system that struggles to channel capital into productive sectors.
How Nigeria’s 9.4% credit-to-GDP ratio compares
- Kenya: 31.6% of GDP, more than three times Nigeria’s level
- Egypt: 28.3% of GDP
- Côte d’Ivoire: 21.4% of GDP
- Africa-wide average: 34.6% of GDP (2020–2024)
- Vietnam: 121.6% of GDP; Malaysia: 121.5% of GDP, the AfDB reported
Those comparisons place Nigeria’s credit depth among the weakest in the region, despite being the continent’s largest economy by nominal GDP.
SMEs and consumers remain largely shut out of bank credit
Dr. Muda Yusuf, the chief executive of the Centre for the Promotion of Private Enterprise, has consistently argued that the structure of bank lending in Nigeria favors government instruments over productive investment. In a June 2026 response to the IMF’s Article IV Consultation Report on Nigeria, APA News reported, Yusuf warned that prohibitive borrowing costs are undermining productive investment across the economy.
“The cost of credit in Nigeria has reached levels that are becoming increasingly prohibitive for productive investment. Lending rates remain among the highest in the world, making it difficult for businesses to expand, invest or create jobs.” — Dr. Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise
CPPE’s analysis found that SME credit accounts for roughly 1% of total bank lending, compared with a sub-Saharan African average of about 5%, despite the sector contributing nearly 50% of GDP and over 80% of employment.
Consumer credit tells a similar story, sitting at about 7% of total lending versus a regional average of 15% to 25%, the organization noted in its March 2026 policy brief.
The financing gap for Nigerian SMEs alone stands at an estimated ₦48 trillion, a figure that dwarfs the monthly increments showing up in the CBN’s headline credit numbers.
What credit growth signals for the rest of 2026
Economic analyst Dr. Albert Miyaki told Nairametrics that elevated borrowing costs continue to restrict economic productivity, even as headline credit numbers move higher each month.
Broad money supply also expanded sharply, reaching ₦129.21 trillion in May from ₦124.99 trillion in April, a sign that liquidity across the financial system continues to build despite the CBN’s restrictive stance.
Inflation rose to 15.93% in May, marking the third consecutive monthly increase, the National Bureau of Statistics reported.
If that figure begins to moderate over the coming months, several economists expect the central bank to consider additional rate reductions in the second half of 2026, Nairametrics reported.
For Nigerian businesses and consumers, the ₦81 trillion credit milestone may feel less like a breakthrough and more like a reminder that access to affordable financing remains one of the economy’s most persistent structural challenges.
