Nigeria’s private sector credit market showed renewed signs of life in December 2025, climbing to N75.8 trillion from N74.63 trillion the previous month, according to the latest monetary and credit statistics released by the Central Bank of Nigeria (CBN).
However, the modest N1.17 trillion monthly increase masks a more complex picture of financial fragility and cautious recovery in Africa’s largest economy.
The December uptick, while encouraging, still leaves lending levels significantly below the N78.02 trillion recorded in the same month of 2024, highlighting the challenging operating environment that has characterized much of the past year for Nigerian banks and borrowers alike.
The 2025 credit landscape has been defined by sharp fluctuations and persistent uncertainty. After opening the year at N77.3 trillion in January, private sector credit reached its zenith at N78.07 trillion in April before entering a prolonged contraction that lasted through the summer and autumn months.
Industry analysts attribute the mid-year decline to a convergence of factors: tightening financial conditions, elevated risk aversion among commercial banks, and broader macroeconomic headwinds that dampened business confidence and investment appetite. Throughout the year, credit levels oscillated within a wide N72 trillion to N78 trillion band, reflecting the unstable terrain navigated by both lenders and borrowers.
The December rebound, modest though it may be, represents the first sustained uptick after months of weakness, suggesting that recent monetary policy interventions by the CBN may finally be gaining traction within the banking system.
Financial sector observers note that the Central Bank’s recent policy adjustments appear to be gradually influencing lending behavior, though the recovery remains tentative. The month-on-month gain of approximately N1.17 trillion indicates renewed momentum, but economists caution against premature optimism given the year’s earlier setbacks.
“What we’re seeing is a partial recovery, not a complete reversal of the challenges faced earlier in 2025,” explained one banking sector analyst who requested anonymity. “Banks remain cautious, risk assessment criteria are still stringent, and many businesses continue to face difficulties accessing affordable credit.”
While private sector credit showed modest improvement, the broader domestic credit picture reveals a different dynamic. Net domestic credit—encompassing lending to both government and private sectors—surged to N110.05 trillion in December from N100.98 trillion in November, marking a substantial N9.07 trillion monthly increase.
The December 2025 figure also represents a year-on-year rise from N105.16 trillion recorded in December 2024, pointing to sustained expansion in overall domestic borrowing over the twelve months.
The sharp divergence between moderate private sector credit growth and robust net domestic credit expansion underscores the Nigerian government’s increasing financing needs. As public sector borrowing accelerates, concerns have mounted about potential crowding-out effects that could limit credit availability for private businesses and dampen economic growth prospects.
As Nigeria enters 2026, the trajectory of private sector credit will likely depend on several interconnected factors: the CBN’s monetary policy stance, inflation dynamics, exchange rate stability, and the broader macroeconomic environment. While December’s figures offer a glimmer of hope, the road to sustained lending recovery appears long and uncertain.
For now, the data confirms what many market participants have experienced firsthand: a financial system still finding its footing after a turbulent year, with recovery underway but far from complete.
WHAT YOU SHOULD KNOW
Nigeria’s private sector credit inched up to N75.8 trillion in December 2025, signaling a modest recovery after months of decline—but it remains below 2024 levels, reflecting a banking system still grappling with tight conditions and risk aversion.
The real concern lies in the stark contrast: while private lending struggles to recover, government borrowing has surged dramatically to N110.05 trillion, raising fears that public sector financing needs may be crowding out credit to businesses and threatening long-term economic growth.
The recovery is fragile, and government debt appetite could stifle the private sector’s access to capital just when it needs it most.
