CBN cuts MPR to 26.5%, digital lenders may lower borrowing costs

Central Bank of Nigeria (CBN) reduces benchmark interest rate to 26.5% from 27%, first cut since September 2025. Rate cut follows 11-month inflation decline to 15.10% in January. MPR cut signals easing of high-interest-rate environment. Digital lenders typically borrow at rates linked to MPR, so lower benchmark could reduce their funding costs. Gbemi Adelekan, Money Lenders Association president, confirms impact on lending costs. Unlike commercial banks, digital lenders rely on wholesale funding rather than customer deposits. Higher MPR over past year forced lenders to raise customer rates or absorb thinner margins. Current loan app rates range 5-15% monthly. Experts caution rate cuts won't provide immediate relief due to existing loan books and negotiated rates. Digital lenders may gradually adjust pricing. Industry shifting from high-risk nano loans (under ₦10,000) to quality customers with verifiable income to reduce non-performing loans. FCCPC authorized 469 digital lenders nationwide as of February 24, 2026.

SOURCE: https://techcabal.com/2026/02/24/digital-lenders-eye-cautious-rate-cuts-after-mpr-cut/