Oil and Gas Firms Emerge as Biggest Beneficiaries of Bank Loans, Report Shows

Nigeria’s oil and gas sector attracted the largest share of bank lending in the first half of 2025, accounting for 30 percent of deposit money banks’ loan portfolio, according to Credit Direct’s 2025 Nigeria’s Credit Landscape Report.

The sector emerged as the single largest recipient of bank credit during the period, ahead of manufacturing and financial institutions, which accounted for 16 percent and 12 percent respectively. Other sectors each received less than 10 percent of total lending.

The findings highlight a growing disconnect between credit allocation and the structure of the Nigerian economy.

According to the report, the non-oil economy contributes roughly 95 percent of economic output, while the oil sector accounts for less than 5 percent. A further breakdown showed that services contributed 53 percent of economic activity as of the third quarter of 2025, followed by agriculture at 31.21 percent and industry at 15.77 percent.

Credit Direct said the divergence between lending patterns and economic activity signals a growing misalignment within the financial system, with sectors driving output and employment receiving a smaller share of formal bank credit.

The report noted that banks’ preference for oil and gas is largely driven by the sector’s importance to government revenue, foreign exchange earnings and the presence of large corporate borrowers with established cash flows and stronger repayment profiles.

However, it warned that the concentration of lending in the sector exposes banks to greater risks from oil price volatility, production disruptions and regulatory uncertainty. A prolonged downturn in oil prices or output, the report said, could weaken borrower cash flows, increase refinancing pressures and transmit stress across bank balance sheets.

To address the imbalance, Credit Direct called for a deliberate shift in lending towards services, agriculture, trade and other non-oil sectors that are increasingly driving economic growth and employment.

“Going forward, a deliberate rebalancing of credit toward the sectors driving real economic expansion is imperative,” the report stated.

According to Credit Direct, diversifying loan portfolios beyond oil would strengthen the resilience of the financial system while unlocking lending opportunities in productive sectors capable of supporting broader economic growth and job creation.

The full Nigeria Credit Landscape Report 2025 is available for download from Credit Direct: https://www.creditdirect.ng/2025-credit-report

About Credit Direct

Credit Direct is building Africa’s leading embedded finance business by integrating credit into the supply chains and payment flows of partners, unlocking financial success for individuals and businesses. The company also provides retail investment solutions, expanding its role from access to credit to broader financial growth and wealth-building. Credit Direct has served millions of customers nationwide, including those historically underserved by traditional banking. Credit Direct is a wholly owned subsidiary of First City Monument Bank (FCMB) Group Plc.