Banks in Nigeria are increasingly channeling their lending activities toward the services sector, leaving the industrial sector with a shrinking share of total credit, according to the Central Bank of Nigeria’s (CBN) Third Quarter 2025 Economic Report released on Wednesday.
The report revealed that total credit to the economy fell by 1.93 per cent to ₦57.04 trillion at the end of September 2025, compared to ₦58.16 trillion in June 2025 — a decline attributed to tight monetary conditions and cautious lending by financial institutions.
A breakdown of sectoral distribution showed that while the services sector received ₦31.70 trillion, the industrial sector got ₦22.14 trillion, underscoring banks’ preference for less capital-intensive and quicker-yielding sectors.
According to the CBN, “The services sector accounted for the largest share of credit at 55.58 per cent, followed by industry (38.81 per cent) and agriculture (5.61 per cent).”
The report also highlighted a steep decline in consumer credit, which fell by 27.17 per cent to ₦3.11 trillion in Q3 2025 from ₦4.27 trillion in the preceding quarter.
Within this segment, personal loans dropped by 6.93 per cent to ₦2.15 trillion, while retail loans outstanding plunged to ₦960 billion from ₦1.96 trillion.
The apex bank noted that personal loans continued to dominate consumer lending, accounting for 69.03 per cent of total household credit, while retail loans made up the remaining 30.97 per cent.
The shift toward the services sector, analysts say, reflects banks’ growing appetite for low-risk, high-turnover activities amid tighter monetary policy and lingering macroeconomic uncertainties.
