Nigeria’s Deposit Money Banks (DMBs) reduced lending to key sectors of the economy by N5.45 trillion in 2025, reflecting tighter credit conditions following recent regulatory measures introduced by the Central Bank of Nigeria (CBN).
Latest data released by the CBN showed that total bank credit to eight major sectors declined from N36.77 trillion in 2024 to N31.31 trillion in 2025, representing a 14.8 per cent year-on-year drop.
The reduction followed the CBN’s withdrawal of regulatory forbearance, a temporary policy that had allowed banks to restructure non-performing loans and maintain lending despite breaches of certain regulatory requirements.
With the policy ending, banks have been required to clean up their loan portfolios and address high-risk credit exposures, limiting their capacity to issue new loans.
The sectors most affected include oil and gas, manufacturing, information and communication technology (ICT), construction, education, real estate and general services.
According to the CBN data, the general services sector recorded the largest decline in bank lending, with credit falling by more than N1.45 trillion.
The manufacturing sector also experienced a significant reduction, with lending dropping by about N1.92 trillion.
Credit to the real estate sector declined by more than 17 per cent, while lending to both the oil and gas industry and oil and gas services also recorded notable decreases.
Other sectors, including ICT, education and construction, also experienced lower credit allocation during the review period.
Financial analysts say the decline reflects banks’ efforts to strengthen their balance sheets and comply with stricter regulatory requirements, although reduced lending could affect investment and economic growth in the short term.
