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 price elevated to 32.62 per cent in September 2026 from 29.20 per cent in August 2026.
Maximum lending price refers to the very best permissible rate of interest that lenders can cost debtors. The price is essential for making certain honest 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 the majority Nigerian banks’ most lending price 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 underneath evaluation, Citi Bank noticed its Manufacturing sector most lending price drop to 19 per cent from 20 per cent, whereas Quest Merchant Bank Manufacturing sector most lending price 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 gradual to cut back borrowing prices when charges are eased.
The Washington-based establishment mentioned the nation’s financial coverage transmission mechanism has strengthened because the unification of the international trade (FX) market in June 2023, though distortions throughout 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 improve lending charges throughout tightening cycles however are reluctant to cut back them when coverage situations soften.
The report acknowledged {that a} 100 basis-point improve in the MPR usually pushes treasury invoice and lending charges up by about 175 to 180 foundation factors virtually instantly. However, the same price 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 mentioned.
The establishment famous that interbank charges reply extra evenly to each tightening and easing, whereas deposit charges stay largely unresponsive in both course.
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 options.
CBN knowledge revealed that the common prime lending price additionally rose to .19.04 per cent in September 2026 from 17.86per cent in August 2026. In January 2026, the common prime lending price was at 19.54 per cent, making it the very best up to now since 2006.
The prime lending price signifies the potential price supplied to probably the most creditworthy prospects by Nigerian banks.
Nigeria’s common prime lending price reached an all-time excessive of 19.66 per cent in November 2009 and a document low of 11.13per cent in March 2021.
The regular improve in rate of interest mirrored in the common prime lending price final yr because the CBN intensified its effort to deal with inflation price and stabilize the native foreign money on the international trade market.
Reacting, Investment Banker & Stockbroker, Tajudeen Olayinka acknowledged that Nigerian banks usually are not compelling to adjusted lending price to MPR, however to use it as a information to pricing and repricing loans and advances, plus different monetary devices, in a way that provides credence to threat/return framework related to completely 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 mentioned.
Also, the Vice President, Highcap Securities, David Adonri acknowledged that the rise in lending price in the Nigerian banking sector means there was tight cash provide in the credit score market in September 2026 regardless of large 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 decreased 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 improve in the common most lending and primer lending price amid regular ease in inflation figures.
