CBN Cuts Rates, But Cheaper Loans Still Seem Stuck Somewhere Between Abuja and the Bank Counter

Nigeria’s interest-rate story has entered a familiar chapter: the Central Bank of Nigeria (CBN) has been cutting its benchmark rates, but businesses are still waiting for the full benefit to reach their loan accounts. Director-General of the Institute for Police and Security Policy Research (IPSPR), Dr Charles Omole, has highlighted the concern, saying successive reductions in the Monetary Policy Rate (MPR) have yet to translate into significantly lower borrowing costs for businesses.

The CBN’s latest figures show that the Monetary Policy Committee cut the MPR by 350 basis points, from 26.5 per cent to 23 per cent at its September 21–22, 2026 meeting. The move followed a 50-basis-point reduction in February, while the rate was held at 26.5 per cent in May and July.

MPR Goes Down, But Loan Bills Are Apparently Taking the Scenic Route

In theory, lower policy rates should gradually make money cheaper to borrow. In practice, the transmission from the CBN’s policy table to the business owner’s bank account can be considerably slower. Recent analysis has pointed to the difference between the benchmark rate and the actual rates charged by individual banks, which depend on funding costs, credit risk, operating expenses and the profile of each borrower.

That disconnect has become an important economic issue because businesses need affordable credit for working capital, investment and expansion. The Centre for the Promotion of Private Enterprise and the Lagos Chamber of Commerce and Industry have both called for banks to reflect the latest MPR reduction in their lending rates

When Interest Rates Fall Faster Than Bank Lending Rates

There is evidence that the problem is not entirely new. A recent NISER sectoral report found significant asymmetry in Nigeria’s monetary-policy transmission, noting that lending rates have tended to respond more quickly when policy tightens than when policy eases. The report also identified particularly weak transmission to SME lending.

And this is where the satire practically writes itself. The MPR has been told to come down, but the business owner waiting for a cheaper loan may need binoculars to spot the reduction. Recent reporting also showed that average maximum lending rates had remained elevated even as the policy environment began easing, although some moderation has occurred.

For businesses, however, this is more than a joke about numbers. Expensive credit can affect how much a company can produce, how many workers it can employ, whether it can expand and whether it can survive periods of weak cash flow. Omole’s warning therefore places attention on the crucial question of monetary-policy transmission: when the CBN cuts the price of money at the policy level, how quickly does that relief reach the real economy?

The coming months will show whether the latest MPR reduction finally travels beyond the CBN’s policy statement and into the actual loan offers confronting Nigerian businesses. OGM News NG will continue to watch the numbers, the banks and, most importantly, the businesses still waiting for cheaper credit to stop being a promise on paper and become something they can actually afford.