Increase in Credit to Nigerian Private Sector
Credit extended to the private sector by the Nigerian banking industry saw a slight uptick, reaching N75.62 trillion in February 2026. This growth can be attributed to stronger capital buffers, bolstered by a recent recapitalization drive that has improved lending conditions within the domestic economy.
Overall Credit Growth Reflects Economic Recovery
The latest figures from the Central Bank of Nigeria (CBN) indicate that total credit to the national economy rose to N111.39 trillion in February, marking a 1.8% increase from N109.42 trillion in January. This figure represents the highest total credit level since November 2024, when loans had peaked at N115.57 trillion, signaling a gradual recovery in credit expansion after prolonged financial challenges.
Private Sector Credit Shows Slight Year-on-Year Decline
In detail, the breakdown of credit data reveals that private sector lending remained predominant, with a marginal increase from N75.24 trillion in January to N75.62 trillion in February. However, year-on-year comparisons show a decline of 0.8% from N76.25 trillion recorded in February 2025. This suggests ongoing limitations in financing for the real sector.
Significant Government Borrowing Increases
In contrast, credit to the government demonstrated a notable increase, rising from N34.18 trillion in January to N35.77 trillion in February. This marks the highest level of government borrowing since November 2024, when it stood at N39.61 trillion. The year-on-year surge of 24.2% from N27.11 trillion in February 2025 underscores the ongoing fiscal pressures and reliance on domestic financing.
Increase in Net Domestic Credit Signals Banking Expansion
Overall, net domestic credit grew by 7.8% year-on-year, rising from N103.36 trillion in February 2025. This growth reflects the consistent expansion of assets within the banking sector, suggesting an environment conducive to lending and investment.
Concerns Over SME Lending Remain
Commenting on these developments, Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), commended the central bank for executing what he termed an orderly and confidence-instilling recapitalization exercise. Nevertheless, he raised alarms regarding the insufficient credit flow to small and medium-sized enterprises (SMEs), which currently receive only about 1% of total bank lending, significantly below the sub-Saharan Africa average of approximately 5%. Yusuf pointed to this anomaly as a serious structural issue within Nigeria’s financial system.
Trends in Currency Held Outside Banks
In related financial data, the amount of currency circulating outside the banking system has been on a consistent decline since peaking at an all-time high of N5.4 trillion in December 2025. Recent analyses show that cash held outside banks decreased slightly from N5.21 trillion in January to N5.2 trillion in February 2026, although this figure still represents a 15.3% increase compared to N4.51 trillion in February 2025. This ongoing decrease aligns with efforts by financial authorities to bolster financial intermediation and promote cashless transactions, indicating a gradual return of liquidity to the formal financial landscape.
