Nigeria's cash outside banks hits N5.19tn despite CBN's cashless drive

Despite the Central Bank of Nigeria's (CBN) persistent efforts to encourage digital payments and financial inclusion, the amount of cash circulating outside the formal banking system has climbed to N5.19 trillion as of May 2026. Latest statistics from the CBN reveal a N109.34 billion increase from April 2026, marking a 2.15% rise in cash held outside banks.

This trend also shows a significant year-on-year jump of N559.16 billion, or 12.07%, compared to May 2025. This sustained preference for physical currency highlights that a substantial portion of money remains outside formal financial channels. In May 2026, 91.27% of all currency in circulation was held outside banks, a slight increase from April but a decrease from the previous year, suggesting the Nigerian economy remains heavily cash-dependent.

The persistence of large cash holdings outside the banking system poses challenges for monetary policy. It limits banks' ability to intermediate funds through deposits and credit creation. This situation persists despite the expansion of electronic payment platforms, mobile banking, and fintech services, and the CBN's broader initiatives. The CBN has outlined an ambitious plan, Nigeria Payments System Vision 2028, aiming to bring cash held outside banks into formal channels and onboard 50 million new Nigerians by 2028.