Top 5 Nigerian Banks that Gave the Most Loans in 2023 

The manufacturing sector faced tough economic conditions with depreciating exchange rates, high inflation, and reduced purchasing power in 2024. To combat inflation, the Central Bank of Nigeria raised interest rates and tightened liquidity among Nigerian banks.

Despite these challenges, manufacturers continued to rely heavily on bank loans for their working capital and expansion needs. Stanbic IBTC data showed a slight improvement in Nigeria’s PMI, rising from 51.1 in April 2024 to 52.1 in May 2024, as manufacturers navigated these economic challenges. 

This resilience was mirrored in the lending patterns of major banks, which provided substantial support to the sector.

In 2023, the total loans from the top lenders to the manufacturing sector increased significantly, reaching N5.7 trillion, up from N4.3 trillion in 2022, marking a 31% rise. While some of this growth was due to exchange rate revaluation for foreign currency loans, there was also notable genuine growth in lending activities.

Here are the top Nigerian banks that provided the most loans to the manufacturing sector last year.

Zenith Bank

Zenith Bank led the pack, extending its loans to the manufacturing sector to N1.6 trillion in 2023, up from N1.25 trillion in 2022. This impressive increase highlights Zenith Bank’s commitment to supporting manufacturing growth, even amid economic uncertainties. 

The bank managed a robust net carrying amount of N1.44 trillion for these loans despite a significant rise in impairment allowances.

First Bank of Nigeria

First Bank of Nigeria recorded a remarkable 68% increase in loans to manufacturers, reaching N1.29 trillion in 2023 from N769.7 billion in 2022. This growth was primarily driven by a surge in term loans, which saw a 154% increase. 

Although overdrafts declined significantly, First Bank’s project financing for the manufacturing sector also rose by 74%, demonstrating its strong support for industrial development.

Access Bank

Access Bank followed closely, with loans to the manufacturing sector rising to N839.1 billion by the end of 2023, up 12% from N746.4 billion in 2022. 

The increase was spread across various sub-sectors, including food manufacturing, cement production, and steel rolling mills. 

Stanbic IBTC

Stanbic IBTC saw a notable 53% increase in its lending to the manufacturing sector, reaching N651.8 billion in 2023 from N425 billion in 2022. 

The manufacturing sector was the highest contributor to Stanbic’s loan portfolio, benefiting from the bank’s relatively low prime lending rates, which stood at 8% for most of the year. This competitive rate made Stanbic IBTC a preferred lender for manufacturers.

UBA Plc

UBA Plc significantly increased its loans to the manufacturing sector to N495.8 billion in 2023 from N468.6 billion in 2022. The bank’s term loans saw a substantial rise, while overdrafts experienced a decrease. 

Despite higher lending rates ranging between 28.50% and 32%, UBA remained a crucial financial partner for manufacturers seeking to expand their operations.

What you should know

Overall, the top lenders’ support was crucial for the manufacturing sector, which heavily depended on bank loans for working capital and capacity expansion. The total loans provided by these top banks to the manufacturing sector amounted to N5.7 trillion in 2023, a significant increase from N4.3 trillion in 2022. 

This 31% growth not only reflects the sector’s resilience but also the banks’ confidence in its potential to drive economic stability and growth.

Despite high borrowing costs, with benchmark interest rates in Nigeria at 18.75% by the end of 2023, the manufacturing sector’s reliance on these loans underscores its vital role in the nation’s economy. 

The increased lending from top banks indicates a strong belief in the sector’s ability to overcome challenges and contribute to Nigeria’s economic expansion.