In a year of sharp economic contrasts, Nigerian banks earn N14tn interest from customer loans in 2024, while manufacturers and small businesses face a growing credit crisis. Data from the audited financial results of nine major banks show a staggering 119.55% rise in interest income compared to 2023.
The institutions—Access Holdings, Zenith Bank, First Holdco, UBA, FCMB Group, Fidelity Bank, Stanbic IBTC Holdings, GTCO, and Wema Bank—collectively posted N14.26 trillion in interest income, up from N6.49 trillion in the previous year.
This record-breaking revenue follows a period of aggressive monetary tightening by the Central Bank of Nigeria (CBN), which raised the Monetary Policy Rate (MPR) from 18.75% in 2023 to 27.50% by the end of 2024. The policy aimed at taming inflation, which rose to 34.80% in December 2024, but has inadvertently stifled credit access for productive sectors.
Top Bank Performers in Interest Income Growth
- First Holdco: +155% to N2.39tn
- GTCO: +148% to N1.32tn
- Zenith Bank: +137.74% to N2.72tn
- Access Holdings: +98.69% to N3.11tn
- UBA: +120% to N2.37tn
Despite this impressive income, some of it was accrued from impaired loans. For example:
- Zenith Bank reported N18.25bn in impaired financial assets
- UBA noted N4.26bn accrued from bad loans
- Fidelity Bank disclosed N8.10bn from similar sources
Real Sector Suffers Amid Rising Costs
While Nigerian banks earn N14tn interest, the real economy is feeling the sting. Manufacturers reportedly spent N1.3 trillion on interest payments alone in 2024. Francis Meshioye, President of the Manufacturers Association of Nigeria, warned that interest rates of 30–37% are unsustainable for business survival.
“We are paying 35% just to keep the lights on,” Meshioye lamented, highlighting that energy and credit costs are crushing the sector.
Ngozi Uko, an agricultural finance consultant, echoed the concern, noting that smallholder farmers now lack access to affordable loans. This, she said, is partly to blame for food inflation, which has surged past 35%, deepening hunger across the country.
A Financial Model Under Scrutiny
Analysts like Tunde Ajayi of Financial Derivatives Company believe the imbalance points to a deeper issue in Nigeria’s financial architecture. He says banks are incentivized to prioritize risk-free government securities and high-interest loans to large clients, leaving small and medium enterprises (SMEs) and the agricultural sector financially strangled.
“This model is unsustainable. It rewards profitability over productivity,” Ajayi said.
Long-Term Implications
While the CBN’s policies may stabilize inflation, they risk hollowing out the sectors that create jobs, fuel domestic production, and support inclusive growth. With over 133 million Nigerians living in multidimensional poverty, the credit crunch could deepen inequality and slow economic diversification.
As Nigerian banks continue to post record profits, the question remains: at what cost to the broader economy? For now, the growing gap between financial institutions and the productive economy highlights the need for a balanced credit policy—one that supports both stability and inclusive growth.
