CBN rate cut fails to unlock credit as Nigerian banks lending decline - Businessday NG

Nigerian banks accumulated more liquidity in the first four months of 2026, but lending to businesses saw a major decline despite the Central Bank of Nigeria’s decision to lower interest rates earlier this year, new CBN data has shown.

Figures released by the CBN in its money and credit statistics showed that the broad money supply rose to N124.99 trillion in April 2026 from N123.12 trillion in February, indicating that liquidity in the financial system continued to expand.

The increase came after the Monetary Policy Committee reduced the Monetary Policy Rate by 50 basis points to 26.5 percent in February, marking the first rate cut after months of aggressive monetary tightening aimed at slowing inflation and stabilising the naira.

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However, despite rising liquidity and growing deposits within the banking system, credit to the private sector weakened significantly. The CBN data showed that credit to the private sector fell to N80.59 trillion in April from N94.61 trillion in February.