November 27, (THEWILL) — Nigeria’s private-sector credit recorded a strong rebound in October 2025, rising to N74.41 trillion from N72.53 trillion in September, an increase of about N1.88 trillion or 2.6 percent, according to the latest data from the Central Bank of Nigeria (CBN). This marks the strongest monthly credit growth recorded so far in 2025.
The sharp rise comes immediately after the CBN reduced the Monetary Policy Rate (MPR) by 50 basis points, from 27.5 percent to 27 percent, at its September meeting, the first policy-rate cut since 2020.
Analysts say the reduction helped ease borrowing costs and encouraged banks to expand their loan books after months of subdued credit activity.
Broad money supply (M3) also increased during the period, rising from N117.78 trillion in September to N119.04 trillion in October, reflecting higher liquidity in the system.
Despite October’s rebound, credit conditions have been uneven throughout the year:
• Credit peaked at N78.1 trillion in April before slowing.
• It fell to N76.1 trillion in June.
• By September, it slipped to N72.53 trillion, the lowest in 18 months.
While the October rise is substantial, it only partially recovers earlier declines. Year-on-year, private-sector credit rose marginally from N74.07 trillion in October 2024 to N74.41 trillion in October 2025, a modest 0.46 percent increase.
This trend reflects the impact of aggressive monetary tightening earlier in the year, elevated borrowing costs, and fragile loan demand from businesses facing rising input prices and currency volatility.
The October expansion signals a possible turning point in lending activity, with potential positive effects on:
• Business investment
• Working capital for firms
• Employment conditions
• Consumer spending (indirectly, through improved liquidity)
However, economists caution that the rebound remains fragile. Credit levels remain below the April peak, and inflationary pressures, high energy costs, and foreign-exchange uncertainties continue to pose risks to sustained lending growth.
Market observers will monitor whether:
• Banks maintain the increased pace of lending
• Borrowers respond positively to lower financing costs
• Liquidity continues to improve in the broader economy
With structural constraints still weighing on output, particularly in manufacturing, agriculture, and services, the durability of this recovery will depend on both macroeconomic stability and continued policy support.
Ogochukwu Onwaeze
