Access to finance remains one of the biggest challenges facing Nigerian manufacturers, particularly small and medium-scale producers. New financial sector data indicates that commercial bank lending to the manufacturing sector has declined significantly compared with the previous year.
Figures show that banks extended approximately ₦60.35 trillion in credit to manufacturers between January and September 2025, representing a 20.44 percent decline from the ₦75.86 trillion recorded during the same period in 2024.
Read also: Infrastructure-first e-commerce model introduced to simplify SME operations
High borrowing costs limiting business expansion
Manufacturers say the decline reflects persistent difficulties in accessing affordable loans. Despite monetary policy adjustments aimed at stabilising the economy, lending rates offered by many commercial banks remain high.
Business groups report that loan rates for manufacturers frequently range between 32 percent and 37 percent, levels that many SMEs consider unsustainable.
High interest rates increase operating costs and discourage businesses from expanding production capacity.
Read also: NCSP, NACCIMA move to unlock SME‑led industrial growth
Impact on small manufacturers
Small manufacturing firms often rely on bank loans to purchase equipment, expand facilities and finance raw material imports. When credit becomes expensive or difficult to obtain, these businesses may delay investment decisions.
Industry associations warn that reduced lending could slow growth in the manufacturing sector, which plays a key role in job creation.
Limited access to credit can weaken the ability of SMEs to scale operations and compete effectively in domestic and international markets.
Read also: Over 2,000 young Nigerians trained in digital skills to boost SME growth
Calls for improved financial support
Manufacturing stakeholders are urging financial institutions to develop lending programmes tailored to SMEs. Some experts also recommend stronger credit guarantee schemes that reduce lending risks for banks.
Nigeria continues to pursue industrial development policies aimed at boosting domestic production and reducing import dependence.
However, analysts say these goals will be difficult to achieve unless businesses gain access to more affordable financing.
