Nigerian Banking Sector Credit Hits N111.4 Trillion Following Successful National Recapitalisation Exercise

Nigerian domestic credit reached a multi-year high of N111.4 trillion in Feb 2026. Explore how the recapitalization exercise is impacting lending to government.

By: AXL Media

Published: Apr 6, 2026, 5:45 AM EDT

Source: Information for this report was sourced from LEADERSHIP

Banking Sector Recovery Triggers Lending Milestone

The Nigerian banking industry has demonstrated renewed financial strength following the conclusion of a mandatory recapitalization exercise last month. According to fresh data from the Central Bank of Nigeria, total credit to the domestic economy reached N111.39 trillion in February 2026, up from N109.42 trillion in January. This 1.8 percent monthly increase represents the most significant expansion in lending activity since November 2024, signaling a shift toward higher liquidity within the national financial architecture.

Government Borrowing Drives Domestic Credit Growth

A granular analysis of the Central Bank's figures reveals that the momentum was largely sustained by increased state participation in the credit market. Credit extended to the government rose from N34.18 trillion in January to N35.77 trillion in February, reflecting a substantial 24.2 percent increase when compared to the N27.11 trillion recorded in the same period last year. This trend indicates that the public sector remains a primary beneficiary of the newly bolstered capital positions held by the nation’s commercial lenders.

Private Sector Lending Maintains Dominant Market Share

Despite the sharp rise in public sector credit, the private sector continues to hold the largest portion of the total domestic credit pool. Lending to private enterprises grew slightly to N75.62 trillion in February from N75.24 trillion the previous month. However, a year on year comparison shows a marginal decline of 0.8 percent from the N76.25 trillion reported in February 2025, suggesting a cautious approach by banks toward corporate and individual borrowers despite improved capital adequacy.