Nigerian Banks Channel Record Funds into CBN Deposits as Loan Growth Slows – September 30, 2025
Story: written by Uzuh Rita September 30,2025
Nigerian commercial banks have significantly increased their cash deposits with the Central Bank of Nigeria (CBN), signaling weak lending activity to businesses and households.
Financial analysts noted that the surge in deposits reflects a cautious approach by lenders amid rising credit risks, volatile economic conditions, and stricter regulatory requirements. Instead of expanding credit to the private sector, banks are opting for the safety of risk-free placements with the apex bank.
The latest figures show that excess liquidity within the banking sector has reached record levels, underscoring concerns about sluggish credit growth in Africa’s largest economy. Experts warn that the trend could limit access to funding for small businesses and manufacturers, further slowing economic recovery.
Economists argue that while banks continue to prioritize security over lending, Nigeria’s real sector faces growing challenges such as high interest rates, inflationary pressures, and limited access to affordable credit.
Industry watchers suggest that unless lending conditions improve, the private sector could struggle to generate jobs and stimulate growth, forcing policymakers to seek new strategies to balance financial stability with economic expansion.
