Tight monetary conditions trigger decline in credit to industry, other sectors

2026-02-04 - 13:48

By Elizabeth Adegbesan Tight monetary conditions in Nigeria’s financial sector have led to a decline in credit to the industry, services and consumer segments of the economy, according to the Central Bank of Nigeria (CBN). The development was contained in the CBN’s third quarter (Q3) Economic Report for 2025, released on Tuesday. According to the report, total credit by Other Depository Corporations (ODCs) to the economy fell by 1.93 per cent to ₦57.04 trillion at the end of Q3 2025, down from ₦58.16 trillion recorded at the end of June 2025. The CBN attributed the decline to tight monetary conditions. “Credit to the industry and services sectors declined slightly by 1.86 per cent and 2.19 per cent to ₦22.14 trillion and ₦31.70 trillion, respectively,” the report stated. Further analysis showed that the services sector accounted for the largest share of total credit at 55.58 per cent, followed by industry at 38.81 per cent and agriculture at 5.61 per cent. Consumer credit also recorded a sharp decline during the period. The report indicated that consumer credit fell by 27.17 per cent to ₦3.11 trillion in Q3 2025, from ₦4.27 trillion in Q2 2025. Under consumer credit, personal loans declined by 6.93 per cent to ₦2.15 trillion in Q3 2025, compared with ₦2.31 trillion in the preceding quarter. Similarly, outstanding retail loans dropped significantly to ₦960 billion in Q3 2025, from ₦1.96 trillion recorded in Q2 2025. “In terms of share, personal loans maintained dominance, accounting for 69.03 per cent of consumer credit, while retail loans constituted the balance,” the CBN added.