Nigeria's Lending Rate Drops to 29.32% Amid Policy Changes

In December 2024, Nigeria's average maximum lending rate decreased to 29.32%, down from 29.71% in the previous month. This change follows the Central Bank of Nigeria's (CBN) decision to cut the monetary policy rate to 27% during its last Monetary Policy Committee (MPC) meeting.

The maximum lending rate is the highest interest rate banks charge for loans, which is influenced by the CBN's monetary policy rate. The CBN's data indicates that the average maximum lending rate was 29.79% in January 2025 and 29.71% in December 2024.

The MPC's decision to maintain the monetary policy rate reflects concerns about potential short-term inflation spikes. Analysts from Cordros Research anticipate a further decline in the average maximum lending rate, as the CBN is expected to hold its monetary policy rate steady in its first meeting of 2026.

The cautious approach of the MPC is partly due to uncertainties surrounding the Consumer Price Index (CPI) rebase.