The Business NG - August 18, 2025

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Credit Growth Needs Real Economy Impact

Nigeria’s credit market remains under strain despite the Central Bank of Nigeria (CBN) keeping its policy rate steady at 27.50% for the third consecutive meeting. The CBN’s Credit Conditions Survey for Q2 2025 highlights a paradox: while credit availability has increased across secured, unsecured, and corporate segments, borrowing costs remain prohibitively high.

This disconnect is troubling. The MPC’s aggressive tightening in 2024 may have slowed inflation, but it has also left businesses and households grappling with elevated financing costs. Financial institutions, cautious about risk exposure, are prioritising asset quality over lending expansion, creating a credit system that appears liquid on paper but inaccessible in practice.

True economic recovery requires more than statistical credit growth—it demands affordable access. SMEs, manufacturers, and households must feel the impact of improved lender confidence through realistic interest rates and supportive financial products. Without this, Nigeria risks a credit market that sustains bank balance sheets but fails to energise the productive economy.

The CBN must now focus on bridging this gap, ensuring that monetary policy aligns with real-sector needs. Growth depends not on credit availability alone, but on its accessibility and affordability.