Nigeria’s banking sector average maximum lending rate closed August 2026 at 29.19 per cent, down from 33.16 per cent in July, according to the Central Bank of Nigeria’s latest money market indicator.
The drop, the lowest recorded this year, arrives alongside separate CBN data showing credit to the private sector rising for a third consecutive month to N84.55 trillion, up from N83.43 trillion in July.
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A rate cycle that has moved unevenly
The lending rate had peaked at 35.17 per cent in February, even as the Monetary Policy Rate was cut to 26.50 per cent from 27 per cent. That gap reflects a pattern the International Monetary Fund has described as rockets and feathers, where lending rates rise quickly when policy tightens but fall only gradually once it eases.
According to the IMF, a 100 basis point hike in the MPR pushes lending rates up by roughly 175 to 180 basis points, while an equivalent cut brings them down by only 25 to 30 basis points. For Nigerian businesses, that asymmetry has meant absorbing the full weight of tightening while waiting far longer for any relief to arrive.
As of late July, Stanbic IBTC carried the highest general maximum lending rate in the sector at 60 per cent, with Ecobank and FCMB close behind. Citibank and Rand Merchant Bank Nigeria were among the lowest, at 20 per cent.
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Where private sector credit stands
Private sector credit has now gained N3.51 trillion since May, when it stood at N81.04 trillion. That recovery follows a sharp contraction earlier in the year, when credit fell from a February peak of N94.61 trillion to N80.59 trillion by April.
Government credit fell for a third straight month to N32.70 trillion in August, widening domestic lending toward the private sector. Even so, private sector credit remains about N10 trillion below its February high.
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What it means for businesses
Analysts at Cordros Research expect the CBN’s Monetary Policy Committee to hold the MPR at 26.50 per cent at its next meeting, citing a hawkish global backdrop alongside domestic disinflation and firmer external buffers. They see November as the more likely window for any further cut.
For Nigerian SMEs, a lending rate easing toward 29 per cent is welcome after months above 33 per cent, but it remains far above what most small businesses can profitably service. The direction is now clearly downward. Whether it falls fast enough to change real borrowing decisions is a separate question entirely.
