Nigerians held N5.19 trillion outside the banking system as of May 2026, highlighting the continued dominance of cash transactions despite years of investment in digital payments infrastructure and financial inclusion initiatives.
Latest Money and Credit Statistics released by the Central Bank of Nigeria (CBN) showed that currency outside banks rose to N5.19 trillion in May from N5.08 trillion in April, representing an increase of N109.34 billion or 2.15% within one month.
The figure was also N559.16 billion higher than the N4.63 trillion recorded in May 2025, reflecting a year-on-year increase of 12.07%.
The development comes as regulators and financial institutions continue to promote electronic payments through bank transfers, mobile money, agent banking networks and fintech platforms.
What the data shows
The CBN data showed that total currency in circulation increased to N5.69 trillion in May 2026 from N5.65 trillion in April, representing a month-on-month rise of N43.59 billion or 0.77%.
- On an annual basis, currency in circulation grew by N675.19 billion, or 13.46%, from N5.02 trillion recorded in May 2025.
- A closer look at the figures reveals that a growing share of the cash printed and released into the economy remained outside the banking system.
- Currency outside banks accounted for 91.27% of total currency in circulation in May 2026, up from 90.03% in April. This means that more than N9 out of every N10 in circulation was held by households, businesses and participants in the informal economy rather than being deposited with banks.
Although the ratio remains slightly below the 92.40% recorded in May 2025, it shows the persistence of cash-based transactions across large segments of the economy.
Bank reserves fall by N841 billion
While cash outside the banking system increased, reserves held by banks with the CBN moved in the opposite direction.
- According to the data, bank reserves declined from N34.603 trillion in April to N33.763 trillion in May, representing a decrease of N840.77 billion or 2.43%.
- The decline suggests lower liquidity buffers within the banking system during the month, even as more cash circulated outside formal financial channels.
However, compared with May 2025, bank reserves remained significantly higher. The reserve balance increased by N2.90 trillion from N30.865 trillion a year earlier, representing annual growth of 9.39%.
What you should know
The latest figures suggest that Nigeria’s transition toward a more digital economy is occurring alongside sustained demand for physical cash rather than replacing it.
- Despite the rapid growth of instant payment platforms, mobile banking applications, fintech services and agent banking networks, cash continues to play a central role in retail trade, transportation, informal commerce and rural economic activities.
- At the launch of the Nigeria Payment System Vision (PSV) 2028 recently in Abuja, CBN Governor Olayemi Cardoso said the new vision builds on Nigeria’s progress in digital payments and seeks to accelerate the country’s transition towards a more inclusive and technology-driven financial ecosystem.
The apex bank aims to reduce cash circulating outside the banking system to below 40% of total currency in circulation.
More than 10 million QR-code and tap-to-pay acceptance points are expected to be deployed across markets, transport hubs, rural communities, and commercial centres nationwide.
