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CPPE wants banks to reduce lending rates after the CBN cut the MPR by 350 basis points to 23 percent.
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The group said cheaper credit could support investment, production and working capital across key sectors of the economy.
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It warned that the rate cut will have limited impact if commercial banks fail to transmit the lower policy rate to borrowers.
September 23, (THEWILL) – The Centre for the Promotion of Private Enterprise has called on Nigerian banks to reduce lending rates following the Central Bank of Nigeria’s 350-basis-point cut in the Monetary Policy Rate, saying cheaper credit is critical to unlocking investment and productive activity.
In a statement signed by its Chief Executive Officer, Muda Yusuf, on Tuesday, the CPPE said the reduction was particularly important for the real sector, where high financing costs have constrained investment, production, working capital and job creation.
The CBN cut the MPR from 26.5 percent to 23 percent at its 307th Monetary Policy Committee meeting held on September 21 and 22, 2026.
CPPE Wants Faster Transmission
Yusuf said the decision could reduce the cost of capital, improve business cash flows and stimulate investment in manufacturing, agriculture, construction, logistics and other sectors with long investment cycles and tight profit margins.
However, he said the economic benefits would depend largely on how quickly banks adjust their lending rates.
“The CPPE expects banks to reflect the new monetary policy environment in the pricing of credit. Lending rates on both new and existing facilities should progressively adjust downwards”, Yusuf said.
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He warned that without meaningful transmission to borrowers, the impact of the policy adjustment on investment and economic growth would be limited.
The call comes as businesses continue to contend with elevated borrowing costs despite the easing of inflationary pressures and improved conditions in the foreign exchange market.
CBN Retains Tight Liquidity Requirements
Alongside the MPR reduction, the MPC recalibrated the policy corridor to +50/-300 basis points around the new benchmark rate.
This puts the Standing Lending Facility at 23.5 percent and the Standing Deposit Facility at 20 percent.
The committee, however, retained the Cash Reserve Ratio at 45 percent for deposit money banks and 16 percent for merchant banks. It also maintained the 75 percent CRR requirement on non-TSA public-sector deposits.
The CBN said the corridor adjustment was an operational realignment aimed at strengthening monetary policy transmission and reinforcing the primacy of the MPR.
The rate cut followed a period of easing inflation. Headline inflation stood at 15.39 percent in August, down from 15.43 percent in July and 15.91 percent in June, according to the National Bureau of Statistics.
Lower Rates Could Support Businesses
The CPPE said lower lending rates would give businesses greater room to finance inventories, expand production and undertake new investments.
For highly leveraged companies, cheaper credit could also reduce finance costs and improve cash flow, while lower borrowing costs could make longer-term projects more commercially viable.
The key test, however, will be whether the 350-basis-point reduction in the CBN’s benchmark rate is reflected in commercial lending rates.
The CPPE said banks should progressively reprice both new and existing facilities to ensure that the monetary policy easing reaches businesses and households.
The 350-basis-point reduction is the largest cut in the MPR since December 2006, when the CBN reduced the benchmark by 400 basis points from 14 percent to 10 percent.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
