Borrowing costs across Nigeria’s banking sector remain elevated, with lending rates ranging from about 20% to as high as 46%, reflecting the country’s tight monetary environment and banks’ differing risk assessment models.
Although the Central Bank of Nigeria (CBN) provides a benchmark through the Monetary Policy Rate (MPR), individual banks retain the flexibility to set lending rates based on factors such as funding costs, credit risk, operational expenses, and customer profiles.
At its 305th Monetary Policy Committee meeting, the CBN retained the MPR at 26.5%, citing persistent inflationary pressures and the need to maintain macroeconomic stability.
Interbank rates have since traded within the 21.9% to 22.5% range in the past month, while inflation rose slightly to 15.93% in May 2026 from 15.69% in April, reinforcing the cautious stance adopted by monetary authorities.
As a result, commercial banks continue to price loans at varying levels, offering lower rates to prime borrowers with strong credit histories while charging significantly higher rates to customers deemed riskier.
How lending rates compare among banks
A review of lending rates across major banks shows significant differences depending on loan categories and customer segments.
Zenith Bank’s lending rates vary according to loan type and borrower profile. Its MSME loan product, which caters to businesses seeking between N500,000 and N2 million, attracts an annual interest rate of 27%.
The bank’s Z-Woman loan, designed for female-owned businesses across various sectors, carries an interest rate of 16% per annum, with a maximum facility size of N10 million and tenors ranging from 12 to 24 months.
- GTBank’s retail and consumer lending products remain among the most expensive in the market.
- Its Quick Credit facility attracts a monthly interest rate of 2.95%, translating to approximately 35.4% annually. The bank’s Premium Advance product charges a flat monthly fee of 2%, equivalent to about 24% per annum.
- Overall, GTBank’s lending rates currently range between 24% and 42%, depending on the product category.
- Fidelity Bank’s prime lending rate stands at 30%, while its maximum lending rate is 36%.
- The bank notes that actual pricing depends on factors such as borrower creditworthiness, loan type, and prevailing market conditions.
- Access Bank currently offers a prime lending rate of 25.5% and a maximum lending rate of 32%.
- The same pricing structure applies across several loan products, including its education loan offering.
First City Monument Bank (FCMB) maintains a prime lending rate of 31%, while its maximum lending rate reaches 46%, making it one of the highest among major commercial banks.
Sterling Bank’s lending rates range between 21% and 40%, depending on the product and customer category.
Its commercial and corporate lending facilities are typically priced around 29% per annum, while SME-focused loans can attract rates of up to 40%.
The bank’s One Mama loan carries a 20% interest rate, alongside a 1% management fee and a 1% charge for Credit Life and Job Loss Insurance.
Experts weigh prospects for lower rates
Analysts believe recent developments in global markets could influence future interest rate decisions.
Dr. Jerry Igwilo, Co-Founder and Chief Executive Officer of Wynk Limited, said easing geopolitical tensions following the recent U.S.-Iran peace agreement could reduce inflationary pressures globally and create room for lower interest rates.
He noted that several central banks have already begun easing monetary policy and suggested that the CBN could eventually follow suit.
- “If the CBN does not reduce rates at its next meeting, it may decide to maintain them before considering a cut subsequently. Once the CBN begins lowering rates, commercial banks are expected to adjust their lending rates accordingly,” he said.
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, expressed caution over expectations of an immediate reduction in borrowing costs.
According to him, Nigeria’s high interest rates are serving a dual purpose: combating inflation and attracting foreign portfolio investment needed to support foreign exchange liquidity.
- “A significant portion of capital inflows is coming through portfolio investments because of the attractive interest rate environment,” Yusuf said.
- “Ordinarily, the peace deal should support a slight reduction in inflation and interest rates, but the need to sustain foreign capital inflows remains an important consideration for policymakers.”
What you should know
Recent inflation data continue to shape expectations for monetary policy and lending rates.
According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation rate rose marginally to 15.93% year-on-year in May 2026, while month-on-month inflation slowed to 1.75% from 2.13% in April.
Food inflation eased to 16.96% year-on-year, down significantly from 24.55% recorded in May 2025. Monthly food inflation also moderated to 2.98% from 3.63%.
Core inflation, which excludes food and energy prices, stood at 16.82% year-on-year, while the monthly rate increased to 1.94% from 1.03% in April.
Analysts say the trajectory of inflation, foreign exchange stability, and future CBN policy decisions will determine whether borrowing costs begin to ease in the second half of 2026.
