Banks' credit to Nigeria's finance and insurance sector jumped to N9.8 trillion in March 2026, according to the Central Bank of Nigeria's (CBN) latest economic report. This represents a significant increase from the N8.1 trillion recorded in February 2026, marking a month-on-month growth of approximately 21%.
Credit Growth Across Sectors
The CBN's data, released on Wednesday, shows that total banking sector credit to the economy also expanded. Loans to the oil and gas sector rose to N6.2 trillion in March, up from N5.9 trillion in February. Similarly, credit to the manufacturing sector increased to N4.5 trillion from N4.3 trillion over the same period.
According to the CBN report, the surge in finance sector credit was driven by increased lending to insurance companies, pension funds, and other financial institutions. The central bank attributed this to improved liquidity conditions and ongoing monetary policy adjustments.
Impact on Economic Activity
Financial analysts note that higher credit to the finance sector could support economic activities, particularly in capital markets and insurance underwriting. The CBN's data also indicated that the total credit to the private sector reached N45.6 trillion in March, compared to N44.1 trillion in February.
The report highlighted that the growth in credit aligns with the CBN's efforts to stimulate economic growth through targeted lending interventions. However, the central bank cautioned that inflationary pressures and exchange rate volatility remain key risks to credit expansion.
Policy Implications and Outlook
The CBN has maintained a cautious monetary stance, with the Monetary Policy Committee keeping the benchmark interest rate unchanged at 27.5% in its last meeting. The report suggests that sustained credit growth could support GDP expansion, which is projected to grow by 3.3% in 2026.
Industry experts expect that continued credit growth to the finance sector will enhance financial intermediation, particularly for small and medium-sized enterprises. The CBN's data also revealed that non-performing loans remained stable at 4.2% of total credit in March, indicating improved asset quality in the banking system.
The central bank's report concluded that the banking sector remains resilient, with capital adequacy ratio at 14.5%, above the regulatory minimum of 10%. Looking ahead, the CBN plans to sustain its credit expansion policies while monitoring risks from global commodity price fluctuations and domestic fiscal pressures.
