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 fee elevated to 32.62 per cent in September 2026 from 29.20 per cent in August 2026.
Maximum lending fee refers to the very best permissible rate of interest that lenders can cost debtors. The fee is essential for guaranteeing honest lending practices and defending debtors from extreme rates of interest.
According to the CBN Money Market Indicators, the typical 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 fee remained flat between September and October 9, 2026 amid the 350 foundation factors MPR reduce 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 overview, Citi Bank noticed its Manufacturing sector most lending fee drop to 19 per cent from 20 per cent, whereas Quest Merchant Bank Manufacturing sector most lending fee 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 elevate lending charges when the CBN tightens financial coverage, however sluggish to scale 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 international 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 improve lending charges throughout tightening cycles however are reluctant to scale back them when coverage circumstances soften.
The report said {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 fee reduce 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 options.
CBN information revealed that the typical prime lending fee additionally rose to .19.04 per cent in September 2026 from 17.86per cent in August 2026. In January 2026, the typical prime lending fee was at 19.54 per cent, making it the very best thus far since 2006.
The prime lending fee signifies the potential fee supplied to probably the most creditworthy clients by Nigerian banks.
Nigeria’s common prime lending fee 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 improve in rate of interest mirrored in the typical prime lending fee final 12 months because the CBN intensified its effort to sort out inflation fee and stabilize the native forex on the international change market.
Reacting, Investment Banker & Stockbroker, Tajudeen Olayinka said that Nigerian banks are usually not compelling to adjusted lending fee to MPR, however to use it as a information to pricing and repricing loans and advances, plus different monetary devices, in a way that offers credence to danger/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 said that the rise in lending fee 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 said 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 diminished 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 additional improve in the typical most lending and primer lending fee amid regular ease in inflation figures.
