Kayode Tokede
Despite the discount of the Monetary Policy Rate (MPR) to 23 per cent by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) in its final assembly, the banking sector’s common most lending charge elevated to 32.62 per cent in September 2026 from 29.20 per cent in August 2026.
Maximum lending charge refers to the best permissible rate of interest that lenders can cost debtors. The charge is essential for making certain truthful lending practices and defending debtors from extreme rates of interest.
According to the CBN Money Market Indicators, the common most lending had opened January 2026 at 32.68 per cent when MPR was at 27 per cent, and reached a peak of 35.17 per cent in March 2026 as MPR stood at 26.50 per cent.
An investigation by THISDAY revealed that almost all Nigerian banks’ most lending charge remained flat between September and October 9, 2026 amid the 350 foundation factors MPR minimize by MPC.
Specifically, between September 4, 2026 and October 9, 2026, “Manufacturing sector” most lending charges of Access Bank, Alpha Morgan Merchant Bank, Coronation Merchant Bank and Ecobank remained flat at 32.28 per cent, 35.00 per cent, and 35 per cent respectively.
FCMB Bank, Fidelity Bank Plc, First Bank of Nigeria additionally posted 41.40 per cent, 36 per cent and 36 per cent, respectively between September 4, 2026 and October 9, 2026…
In the interval beneath evaluate, Citi Bank noticed its Manufacturing sector most lending charge drop to 19 per cent from 20 per cent, whereas Quest Merchant Bank Manufacturing sector most lending charge moved to 30 per cent from 35 per cent.
In June 2026, the International Monetary Fund (IMF) had expressed that Nigerian banks are fast to increase lending charges when the CBN tightens financial coverage, however sluggish to cut back borrowing prices when charges are eased.
The Washington-based establishment stated the nation’s financial coverage transmission mechanism has strengthened because the unification of the overseas change (FX) market in June 2023, though distortions inside the banking system nonetheless persist.
According to the IMF, rate of interest transmission in Nigeria follows what economists describe as a ‘rockets-and-feathers’ sample, the place banks quickly enhance lending charges throughout tightening cycles however are reluctant to cut back them when coverage circumstances soften.
The report acknowledged {that a} 100 basis-point enhance in the MPR usually pushes treasury invoice and lending charges up by about 175 to 180 foundation factors virtually instantly. However, an identical charge minimize outcomes in solely a 25 to 30 basis-point decline in borrowing prices.
“This asymmetry — statistically significant — implies that banks transmit tightening rapidly and even amplify it but adjust much more slowly during easing cycles,” the IMF stated.
The establishment famous that interbank charges reply extra evenly to each tightening and easing, whereas deposit charges stay largely unresponsive in both path.
The IMF attributed the weak response in deposit charges to restricted competitors amongst banks for buyer deposits and the existence of what it described as ‘captive depositors’ with restricted funding alternate options.
CBN information revealed that the common prime lending charge additionally rose to .19.04 per cent in September 2026 from 17.86per cent in August 2026. In January 2026, the common prime lending charge was at 19.54 per cent, making it the best up to now since 2006.
The prime lending charge signifies the doable charge supplied to probably the most creditworthy clients by Nigerian banks.
Nigeria’s common prime lending charge reached an all-time excessive of 19.66 per cent in November 2009 and a report low of 11.13per cent in March 2021.
The regular enhance in rate of interest mirrored in the common prime lending charge final yr because the CBN intensified its effort to sort out inflation charge and stabilize the native foreign money on the overseas change market.
Reacting, Investment Banker & Stockbroker, Tajudeen Olayinka acknowledged that Nigerian banks aren’t compelling to adjusted lending charge to MPR, however to use it as a information to pricing and repricing loans and advances, plus different monetary devices, in a fashion that offers credence to threat/return framework related to totally different mortgage candidates.
“You’ll recall MPR was adjusted to 23per cent, to make it aligned with what the market is asking for. Only prime borrowers will receive an interest rate that is close to MPR or risk-free rate. It is also a function of demand and supply,” he stated.
Also, the Vice President, Highcap Securities, David Adonri acknowledged that the rise in lending charge in the Nigerian banking sector means there was tight cash provide in the credit score market in September 2026 regardless of huge cuts in MPR.
Cordros Research in a report acknowledged that it anticipated the market efficiency to be formed by the extent to which the coverage adjustment interprets into decrease market yields, improved liquidity and lowered company financing prices.
“Continued macroeconomic stability, particularly in inflation and the exchange rate, will also remain important to investor sentiment. Against this backdrop, 2026FY earnings and dividend announcements, foreign and domestic portfolio flows, corporate actions and company-specific developments are likely to be the key drivers of the market performance in Q4-2026,” the agency had defined.
However, analysts have predicted an extra enhance in the common most lending and primer lending charge amid regular ease in inflation figures.
