The amount of physical cash held outside the banking system by Nigerians increased by 103.8 per cent to N4.923 trillion in September 2026, compared with N2.416 trillion recorded in September 2023, indicating continued reliance on cash despite the growing adoption of electronic payment systems.
Data from the Central Bank of Nigeria (CBN) Money and Credit Statistics also revealed that currency outside banks rose by 10.3 per cent year-on-year, from N4.465 trillion in September 2025 to N4.923 trillion in September 2026.
The figures show that cash holdings outside the banking system have more than doubled within three years, highlighting sustained demand for physical currency and the challenges associated with expanding formal banking and digital payment usage.
A breakdown of the statistics showed that currency outside banks increased by 66.2 per cent, rising from N2.416 trillion in September 2023 to N4.016 trillion in September 2024.
The figure further climbed to N4.465 trillion in September 2025, representing an 11.2 per cent increase from the previous year, before reaching N4.923 trillion in September 2026.
Analysts say the continued rise suggests that many Nigerians still rely heavily on cash transactions despite the increasing use of mobile banking, electronic transfers, Point of Sale (POS) terminals and other digital payment platforms.
Demand Deposits Increase By 71%
Meanwhile, demand deposits in Nigerian banks grew by 70.8 per cent to N39.124 trillion in September 2026, up from N22.903 trillion recorded in September 2023.
According to the CBN data, demand deposits rose to N31.842 trillion in September 2024, representing a 39 per cent increase compared with September 2023.
The figure subsequently increased to N34.642 trillion in September 2025, reflecting an 8.8 per cent year-on-year growth, before reaching N39.124 trillion in September 2026, a further 12.9 per cent increase.
The rising demand deposits indicate an expansion in the volume of funds held in bank accounts that customers can readily access for transactions and withdrawals.
Commenting on the figures, economic and communications expert, Clifford Egbomeade, said the simultaneous increase in bank deposits and cash outside banks showed that formal banking balances and significant demand for physical currency continued to coexist within Nigeria’s payment system.
“The simultaneous increase in demand deposits and currency outside banks points to the coexistence of formal banking balances and substantial demand for physical cash in Nigeria’s payment system.
“However, the two indicators measure different components of monetary activity. Demand deposits represent bank-account balances, while currency outside banks represents cash held outside the banking system.
“Their growth rates alone do not establish how much of the increase in cash holdings is attributable to economic growth, inflation, informal transactions or changes in payment preferences.” he said.
