Bank Loans to Manufacturers Fall 26.8% to ₦5.19trn

Outstanding bank credit to Nigeria's manufacturing sector fell 26.8% in a year, from ₦7.09 trillion in June 2025 to ₦5.19 trillion in June 2026, according to the Central Bank of Nigeria's (CBN) second-quarter 2026 statistical bulletin, as reported by Nairametrics and Leadership. Over the same period, total credit to the private sector rose about 8% to ₦62.79 trillion, with banks lending far more to traders, builders and farmers. The gap matters for factory output, jobs and prices, and for how investors read bank and manufacturing stocks.

The numbers month by month

Credit to manufacturers fell for five straight months before a small rebound in June:

That is a drop of about 21% between January and June, and about 10% between March and June. By our calculation, manufacturing's share of private-sector credit fell from about 12.2% in June 2025 to about 8.3% in June 2026.

Where the money went instead

Leadership's breakdown of the CBN's sectoral table shows banks did not stop lending. They lent elsewhere:

Oil and gas remains the largest single industrial borrower, with almost ₦12 trillion of loans, more than twice what manufacturers owe. Transport and storage credit also fell, to ₦1.66 trillion from ₦1.96 trillion.

What the data can and cannot tell us

These are outstanding balances, not new loans. Nairametrics notes that the figures alone do not show whether the fall came from banks lending less, manufacturers repaying debt, or other changes in loan balances. If manufacturers paid down loans from their own cash, balances would fall even without banks turning them away. And if any of the loans are in foreign currency, exchange-rate moves change their naira value too. The figures reported do not split loans by currency.

What is clear is that manufacturers face high costs. Nairametrics lists electricity, logistics, insecurity, exchange-rate pressure, multiple taxation and input prices as persistent problems for the sector. Those risks can make factory loans less attractive to banks than short-term trade finance, which is repaid quickly.

A sector that still matters

Manufacturing accounted for 9.57% of Nigeria's real GDP in the first quarter of 2026, Nairametrics reported earlier, and paid ₦1.17 trillion in value added tax in 2025, up from ₦803.53 billion in 2024. That means it still contributes a lot of output and tax, even while borrowing less from banks.

The squeeze comes despite the banking recapitalisation. CBN Governor Olayemi Cardoso said at the weekend that banks raised ₦4.65 trillion in new capital, with domestic investors providing slightly more than 20%, Punch reported. Bigger capital buffers allow banks to lend more, but they decide where the loans go.

Will rate cuts help?

The CBN cut its Monetary Policy Rate by 350 basis points to 23% in September. Lower policy rates usually take months to feed into lending rates. Meanwhile, banks can still earn about 15.90% on one-year Treasury bills, set at the 14 October auction, with little risk. Until lending to factories pays better against that option, manufacturers may keep finding bank credit hard to get.

There are signs of wider credit growth in smaller loans. The National Collateral Registry recorded 10,192 debtors in June 2026, up 45.8% from 6,988 a year earlier, mostly individuals borrowing from microfinance banks, Leadership reported.

What this means for investors

• Bank stocks. Loan books are moving towards trade, construction and agriculture. Investors in bank shares may want to watch how these newer exposures perform in the Q3 results due by 30 October.
• Manufacturing stocks. Companies that depend on bank loans may face higher financing costs or slower expansion. Watch finance costs and cash flow in upcoming results. In the week to 16 October, the NGX Industrial Goods Index was almost flat (up 0.004%) and the Consumer Goods Index rose 0.09%.
• Prices and inflation. Less financing for local production can mean more reliance on imports, which matters for prices. Core inflation rose 1.11% month on month in September, Proshare noted.
• Rate cuts. If lending rates fall, credit to factories could recover. That would show up first in the CBN's monthly sectoral data.
• Track it on Gopexly. You can follow listed manufacturers such as Dangote Cement, BUA Cement and Nestlé Nigeria and set price alerts on their Gopexly stock pages.

This is for information only and is not investment advice.

FAQ

How much have banks lent to manufacturers in Nigeria?

Outstanding bank credit to manufacturing was ₦5.19 trillion in June 2026, down 26.8% from ₦7.09 trillion in June 2025, according to the CBN's Q2 2026 statistical bulletin.

Which sectors are getting more bank loans?

Trade and general commerce (up 63.4% to ₦6.30 trillion), construction (up 53.7% to ₦2.88 trillion) and agriculture (up 30.4% to ₦4.16 trillion) recorded the biggest increases among major sectors.

Does this mean banks are lending less overall?

No. Total credit to the private sector rose about 8% to ₦62.79 trillion in the year to June 2026. Banks shifted lending away from manufacturing towards other sectors.

Sources

• Nairametrics, "Bank credit to Nigerian manufacturers falls 26.8% to N5.19 trillion, CBN data show" (19 Oct 2026)
• Leadership, "Manufacturers Face Tighter Credit Crunch As Bank Loans Drop 27%" (19 Oct 2026)
• Punch, "Cardoso: Domestic investors provided 20% of banks' N4.65trn capital" (19 Oct 2026)
• Proshare, "What to Expect from the Markets this Week – 191026" (17 Oct 2026)
• The Whistler, "NGX Trading Value Falls N60.2bn As Market Capitalisation Drops To N160.7tn" (18 Oct 2026)