Average maximum lending rate falls to 33.16% in June, but businesses continue to grapple with high borrowing costs…..
The average maximum lending rate charged by Nigerian banks declined to 33.16 per cent in June 2026, offering borrowers modest relief after months of elevated credit costs, according to the latest data released by the Central Bank of Nigeria (CBN).
The figure represents a drop from 34.78 per cent recorded in May, reflecting a gradual easing in lending conditions following the CBN’s decision to keep its benchmark Monetary Policy Rate (MPR) at 26.5 per cent.
The Monetary Policy Committee (MPC) has maintained the rate since February after approving a 50-basis-point reduction, opting to monitor the impact of earlier policy actions on inflation, exchange rate stability and overall economic activity.
Despite the monthly improvement, borrowing costs remain considerably higher than they were a year ago. In June 2025, the average maximum lending rate stood at 29.51 per cent, meaning lending rates have increased by 3.65 percentage points over the past 12 months.
The maximum lending rate reflects the highest interest banks charge customers on loans and is regarded as a key measure of credit conditions in the economy. Elevated rates often discourage businesses and households from borrowing, limiting investment, expansion and overall economic growth.
CBN data showed that lending rates have remained stubbornly high for most of the year. The average maximum lending rate opened at 32.68 per cent in January, climbed sharply to 35.17 per cent in February, and remained at that level through April despite the central bank’s earlier policy rate cut.
The slow decline in lending rates highlights the limited pace at which commercial banks are passing lower policy rates on to borrowers, a trend analysts say continues to weigh on private sector access to affordable credit.
At its most recent policy meeting, members of the MPC unanimously voted to retain all key monetary policy parameters, citing improved exchange rate stability, easing inflationary pressures and lingering uncertainties in the global economy, including geopolitical tensions in the Middle East and concerns over the outlook for the U.S. economy.
CBN Governor Olayemi Cardoso said the committee’s decision was intended to safeguard macroeconomic stability while allowing the effects of previous policy measures to continue working through the economy.
Meanwhile, businesses have continued to raise concerns over the cost of borrowing, arguing that high interest rates are making it increasingly difficult to expand operations or finance new investments. Manufacturers and small businesses have been particularly affected as they also contend with foreign exchange reforms, rising energy costs and broader inflationary pressures.
Data from the Manufacturers Association of Nigeria (MAN) underscores the challenge, showing that commercial bank credit to the manufacturing sector fell to ₦6.61 trillion in December 2025 from ₦8.53 trillion a year earlier, reflecting tighter financing conditions for the sector.
