Manufacturers Dey Run From Bank Loans Because Interest Rate Too High

Against di backdrop of high-interest-rate regime, leading manufacturers don reduce dia bank borrowings sharply as dem dey run from expensive credit. Financial results for di first nine months of di year (9M’25) show say dia combined bank loans fall by 20.3% to N2.014 trillion from N2.526 trillion for 9M’24. Further findings by Financial Vanguard show say many of di firms don shift funding go equities, corporate bonds and retained earnings, and this move make dia finance cost drop drastically by 52.8% to N662 billion from N1.4 trillion. Turnover jump 37.9% to N10.1 trillion, profits swing from N116 billion loss for 2024 to N2.5 trillion gain for 2025, even though cost of sales rise by 57.9% to N5.7 trillion because of persistent input inflation. Companies like BUA Foods, Nestlé, Nigerian Breweries, Unilever, NASCON, Lafarge, Fidson, Vitafoam, Okomu Oil, Presco and Cadbury all record heavy drops for dia loan books, while big names like Dangote Cement, Dangote Sugar, International Breweries, Guinness and Champion Breweries no even take new loans at all.

Experts dey talk say di high lending rates suppress manufacturers’ appetite for credit as many of dem dey turn to cheaper funding sources like commercial papers, rights issues and retained earnings. Analysts like David Adonri, Muda Yusuf, Tajudeen Olayinka and Clifford Egbomeade agree say di shift away from bank loans na defensive and rational response to tight monetary policy and interest rates wey pass 30%. Dem warn say banks fit face lower income as borrowers dey shun credit, while manufacturers dey enjoy better profit because FX stability and deleveraging reduce finance cost. Even though di sector don show recovery with improved turnover and N2.5 trillion profits, experts still describe di rebound as fragile because inflation, energy cost and infrastructure wahala still dey. Dem say policymakers suppose focus on making credit affordable, supporting production, lowering real costs and pushing growth measures so di momentum fit last reach 2026.