Nigeria’s money supply increased by ₦7.51 trillion in September 2026, reaching ₦146.6 trillion. Yet, in the same month, credit to the private sector fell by ₦537.6 billion, raising questions about how much of the country’s expanding financial liquidity is reaching businesses that need funding.
Data from the Central Bank of Nigeria (CBN) showed that broad money supply rose by 5.4 per cent from ₦139.09 trillion in August to ₦146.6 trillion in September. Since January, it has increased by ₦22.65 trillion, or 18.3 per cent.
However, credit to the private sector declined from ₦84.47 trillion in August to ₦83.93 trillion in September, a monthly drop of approximately 0.64 per cent. The figures present a contrast: the amount of money within the financial system is growing, while lending to the private sector has moved in the opposite direction.
For businesses that depend on loans to purchase stock, pay suppliers, maintain equipment or expand operations, the key question is not simply how much money exists in the financial system, but how accessible that money is and what it costs to borrow.
Why a rise in money supply does not automatically mean more business loans
Money supply measures more than the physical cash available to people and businesses. The CBN’s broad money measure, known as M3, includes currency, demand deposits, savings and time deposits, and foreign currency deposits.
An increase in this measure therefore does not mean that an equivalent amount of new cash is sitting in business owners’ accounts or available for them to borrow. It reflects changes in money and deposits across the financial system.
Banks also do not lend every naira they hold. Their lending decisions depend on factors such as borrowers’ ability to repay, credit risk, available collateral, funding costs and regulatory requirements.
This means that an expanding money supply and a decline in private-sector credit can occur at the same time. However, the September figures alone do not establish whether the decline resulted from weaker demand for loans, stricter lending conditions, repayments or other factors.
Understanding which of these factors is most important would require further evidence from banks, businesses and financial analysts.
The cost of borrowing remains part of the problem
The CBN reduced its Monetary Policy Rate (MPR) from 26.5 per cent to 23 per cent at its September monetary policy meeting. The move lowered the benchmark rate by 3.5 percentage points, but it does not automatically mean that commercial banks will reduce all their lending rates by the same amount. Source: CBN.
The CBN’s published money market indicators put the average prime lending rate at 17.86 per cent and the maximum lending rate at 29.20 per cent in August 2026. These are broad industry indicators rather than rates specific to small businesses, but they illustrate the difference between the central bank’s benchmark rate and the rates charged to borrowers. Source: CBN.
For a small business, the real cost of borrowing also includes the repayment schedule, fees, collateral requirements and the time needed to secure approval. A loan may technically be available but still be unsuitable for a business operating on thin margins.
A business owner considering a loan must weigh the potential returns against the cost of repayment. Where borrowing costs are high relative to expected profits, taking on debt may not be commercially sensible.
What the figures mean for small businesses
The September decline does not mean that every business received less credit, nor does it show that banks stopped lending. Private-sector credit remained about 15.7 per cent higher than its September 2025 level, according to reported CBN data. The latest monthly movement should therefore be considered alongside the longer-term trend. Source: The Guardian.
Still, the figures raise practical questions for businesses seeking formal financing. Are banks receiving fewer viable loan applications? Are borrowers deciding that the interest rates are too high? Are collateral requirements excluding smaller firms? Or are changes in repayments and other lending activity affecting the monthly total?
These questions matter because access to credit can influence whether a business can purchase inventory in bulk, fulfil a large order, invest in equipment or manage a temporary cash-flow gap.
Answering them requires more than national money supply figures. Interviews with small business owners who have recently applied for loans, commercial banks and business associations would help establish where applicants encounter difficulties and whether the problem is availability, affordability or eligibility.
What to watch next
The September figures offer a reason to examine whether the CBN’s rate reduction will eventually translate into more affordable and accessible private-sector lending.
Future money and credit data will show whether the monthly decline in private-sector credit continues or reverses. Changes in banks’ lending rates will also help indicate how much of the policy-rate reduction is being passed on to borrowers.
But the most useful measure for a business owner is more direct: whether a viable business can secure a suitable loan, at a manageable cost, within the time it needs the money.
Nigeria’s money supply reached ₦146.6 trillion in September, but that headline figure does not tell the whole story. The next question is whether the financial system can turn its growing pool of money into productive financing for businesses that need it.
