Senate Urges Greater Access to Credit as CBN Highlights Reform Progress

Senate Questions Credit Growth as CBN Reaffirms Reform Agenda

The Central Bank of Nigeria (CBN) has defended its ongoing monetary and banking sector reforms following concerns raised by the Senate over inflation, credit expansion and the flow of financing to productive sectors of the economy. During a statutory oversight session with the Senate Committee on Banking, Insurance and Other Financial Institutions, lawmakers acknowledged progress in financial sector reforms but urged the apex bank to ensure that stronger bank balance sheets translate into increased lending that supports economic growth.

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The engagement highlighted the balance policymakers are seeking between maintaining macroeconomic stability and expanding access to affordable credit for businesses, manufacturers, infrastructure projects and the housing sector.

Senate Seeks Greater Credit to the Real Economy

Members of the Senate Committee expressed concern that tighter monetary policies and banking sector reforms should deliver measurable benefits for the productive economy rather than strengthening banks' financial positions alone.

Lawmakers urged the CBN to encourage increased lending to sectors that generate employment, expand domestic production and stimulate long-term economic growth. They stressed that improved access to finance remains essential for businesses facing high borrowing costs and limited credit availability.

The committee also examined the impact of inflation, exchange rate reforms, banking recapitalisation and broader financial sector policies on economic activity, while calling for sustained oversight to ensure reforms produce tangible outcomes.

CBN Defends Reform Strategy

Responding to lawmakers, the CBN maintained that its reform agenda is designed to restore macroeconomic stability, strengthen the financial system and create conditions for sustainable economic expansion.

The Bank reiterated that recent reforms including foreign exchange market liberalisation, banking sector recapitalisation and tighter monetary policy are intended to improve investor confidence, reduce market distortions and reinforce financial stability. According to the CBN, these measures provide the foundation for stronger and more sustainable credit growth over time.

The apex bank also reaffirmed its commitment to maintaining price stability, improving foreign exchange market transparency and strengthening regulatory oversight as part of its long-term reform programme.

Inflation Remains a Key Policy Challenge

The discussion comes shortly after the Monetary Policy Committee (MPC) retained the Monetary Policy Rate (MPR) at 26.5%, citing persistent inflationary pressures and global uncertainties, including geopolitical tensions affecting energy prices and supply chains. The CBN argued that maintaining a tight monetary stance remains necessary to preserve gains already recorded in moderating inflation.

While inflation has shown signs of easing in recent months, high interest rates continue to influence borrowing costs across the economy, affecting businesses, developers and households seeking access to finance.

Implications for Housing and Real Estate

For Nigeria's housing sector, the Senate's emphasis on expanding productive credit is particularly significant.

Housing development depends heavily on access to long-term financing for developers, mortgage institutions and homebuyers. Limited credit availability and elevated lending rates continue to constrain residential construction, affordable housing delivery and private sector investment.

A stronger banking sector with greater capacity to extend sustainable credit could improve financing for residential developments, commercial real estate and infrastructure projects. Increased lending to productive sectors may also support construction activity, stimulate demand for building materials and create additional employment across the housing value chain.

However, achieving these outcomes will require balancing financial stability with measures that improve credit accessibility without fuelling inflation.

Investor Confidence and Infrastructure Financing

The CBN maintained that macroeconomic stability remains essential to attracting long-term investment.

Stable monetary policy, transparent financial regulation and a resilient banking system help reduce investment risk and improve confidence among domestic and international investors. These conditions are particularly important for financing large-scale infrastructure projects, including housing estates, transport networks and urban development initiatives.

As banks continue to strengthen their capital positions under the ongoing recapitalisation programme, policymakers expect lending capacity to improve, creating additional opportunities for investment in productive sectors of the economy.

Outlook

The Senate's engagement with the Central Bank underscores a shared objective of achieving macroeconomic stability while ensuring that financial sector reforms translate into broader economic benefits. While the CBN continues to prioritise inflation control and financial system resilience, lawmakers are seeking greater evidence that reforms are expanding credit to businesses, infrastructure and other productive sectors.

For Nigeria's housing market, the direction of monetary policy will remain a key determinant of mortgage availability, development finance and private investment. Sustained progress in banking reforms, combined with improved access to productive credit, could strengthen the financing environment needed to support long-term housing delivery and urban development.

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