Nigerian banks have increased lending rates for preferred corporate borrowers in eight key economic sectors despite the Central Bank of Nigeria’s (CBN) recent reduction in its benchmark interest rate.
An analysis of the CBN’s lending rate schedules for August 2025 and October 2026 showed that average prime lending rates rose in eight of 11 sectors, including agriculture, construction, manufacturing, real estate, education, healthcare, government, and finance and insurance.
Agriculture recorded the highest increase, with its average prime lending rate rising to 24.77 percent from 23.44 percent. Construction increased to 26.40 percent from 25.25 percent, while manufacturing rose to 24.36 percent from 23.79 percent.
Lending rates also increased in real estate, from 25.82 to 26.57 percent; education, from 26.33 to 26.85 percent; healthcare, from 26.11 to 26.96 percent; government, from 25.52 to 26.49 percent; and finance and insurance, from 25.55 to 25.88 percent.
However, rates declined in arts, entertainment and recreation, oil and gas, and information and communication.
The increases come despite the CBN’s decision in September 2026 to cut the Monetary Policy Rate (MPR) by 350 basis points, from 26.5 to 23 percent. The reduction followed easing inflation, which fell to 14.63 percent in September from 15.39 percent in August.
The CBN’s rate reduction had raised expectations of cheaper loans for businesses and households. However, the latest figures suggest that the benefits of monetary easing have yet to reach borrowers uniformly.
Head of Equity Research at Quest Merchant Bank, Tunde Abioye, said the development did not necessarily mean monetary policy was failing.
He explained that lending rates were influenced by banks’ funding costs, liquidity, borrowers’ risk profiles, and pricing decisions, adding that the impact of monetary easing could take time to reflect in lending rates.
Similarly, Nnamdi Nwizu, Co-Founder of Comercio Partners, said increases in average prime lending rates were not widespread across banks.
According to his firm’s analysis of 174 comparable bank-sector observations across seven sectors, 65 recorded reductions, 79 remained unchanged, while 30 recorded increases.
Meanwhile, average maximum lending rates across several sectors declined from 33.78 percent in August 2025 to 32.58 percent in October 2026.
Banks also reduced deposit rates during the period. Average savings deposit rates fell from 7.81 to 6.61 percent, while time-deposit rates dropped from 14.52 to 12.28 percent.
Abioye warned that persistently high lending rates could discourage businesses from borrowing for expansion, equipment purchases, and other long-term investments.
Nwizu added that expensive credit could affect investment, business profitability, and job creation, particularly in agriculture, manufacturing, and real estate.
He, however, cautioned that it was too early to assess the full impact of the September rate cut, which took effect only 17 days before the October lending-rate observation.
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