Credit extended by Nigerian banks to the finance and insurance sector reached N9.8 trillion in March 2026, according to the latest data from the National Bureau of Statistics (NBS). This represents a 15% increase from the N8.5 trillion recorded in December 2025, reflecting a sustained expansion in lending to the financial services industry.
Breakdown of Sectoral Credit Allocation
The NBS report, titled "Selected Banking Sector Data," showed that the finance and insurance sector received the largest share of total bank credit, accounting for 22.5% of the N43.6 trillion in total credit extended to the private sector in March 2026. The manufacturing sector followed with N7.2 trillion, representing 16.5% of total credit, while the oil and gas sector received N5.1 trillion, or 11.7%.
Other sectors that benefited from significant credit allocations include general commerce (N4.8 trillion), agriculture (N3.2 trillion), and construction (N2.1 trillion). The NBS noted that credit to the finance and insurance sector has grown steadily over the past year, rising from N7.2 trillion in March 2025 to N9.8 trillion in March 2026, a 36% year-on-year increase.
Drivers of Credit Growth to the Finance Sector
Analysts attribute the surge in credit to the finance sector to increased demand for working capital by insurance companies, pension fund administrators, and other financial institutions. The NBS report highlighted that the growth in credit aligns with the Central Bank of Nigeria's (CBN) policy of encouraging lending to productive sectors of the economy.
"The increase in credit to the finance sector reflects the growing intermediation role of banks in supporting the financial system's liquidity needs," the NBS stated in the report. The data also showed that the total credit to the private sector rose by 8.7% from N40.1 trillion in December 2025 to N43.6 trillion in March 2026.
Impact on the Broader Economy
The expansion of bank credit to the finance sector is expected to support economic growth by enabling financial institutions to increase their lending to businesses and households. The NBS noted that the finance and insurance sector contributed 5.2% to Nigeria's Gross Domestic Product (GDP) in the first quarter of 2026, up from 4.8% in the same period of 2025.
However, the report also cautioned that the concentration of credit in the finance sector raises concerns about risk concentration and the potential for asset bubbles. The NBS recommended that banks diversify their lending portfolios to reduce exposure to any single sector. The data further revealed that non-performing loans (NPLs) in the finance sector stood at 3.4% in March 2026, slightly below the industry average of 4.1%.
