The amount of physical cash Nigerians hold outside the banking system rose by 10.3% to N4.92 trillion in September 2026, from approximately N4.47 trillion in the same month last year, even as the Central Bank of Nigeria (CBN) intensifies efforts to move more financial transactions onto digital platforms.
The latest Money and Credit Statistics released by the CBN on Wednesday, October 21, showed that cash outside banks increased by approximately N458.22 billion over the 12-month period, reflecting the continued circulation of physical currency alongside the expansion of Nigeria’s digital payment infrastructure.
Cash outside banks refers to physical naira notes and coins held by individuals and businesses rather than kept in bank vaults. It is one measure of cash dependence, although an increase does not necessarily mean Nigerians are abandoning digital payments.
The year-on-year increase comes despite renewed cash withdrawal restrictions introduced in January 2026 and a broader CBN strategy to reduce physical cash holdings while expanding access to digital financial services.
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How cash outside banks changed over the past year
Nigeria’s cash holdings have fluctuated considerably over the past 12 months, with the September 2026 figure showing an increase from a year earlier despite remaining below the peak recorded in December 2025.
In September 2025, Nigerians held approximately N4.47 trillion outside banks, a modest increase from N4.45 trillion in August. That figure rose to N4.65 trillion in October before reaching N5.41 trillion in December, reflecting a significant expansion in physical cash holdings towards the end of the year.
The trend continued into early 2026, when cash outside banks stood at N5.25 trillion in January, before moderating in subsequent months.
By May, the figure was N5.19 trillion, but it declined to N4.92 trillion in June and N4.80 trillion in July as the amount of currency held outside banks contracted.
That downward movement reversed in August, when cash holdings recovered to N4.87 trillion, before rising by another N48.73 billion to N4.92 trillion in September, marking a second consecutive monthly increase.
The September figure, however, remained approximately N490 billion below December’s peak, illustrating how cash holdings can decline over shorter periods while remaining higher on a year-on-year basis.
More significantly, cash outside banks accounted for approximately 89% of Nigeria’s N5.52 trillion currency in circulation in September 2026, compared with roughly 90% a year earlier, when currency in circulation stood at N4.95 trillion. This indicates a slight reduction in the share of currency held outside banks, despite the increase in its nominal value.
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Digital payments are growing alongside physical cash
Despite the increase in currency held outside banks, Nigeria’s digital payment infrastructure has expanded significantly, creating a financial ecosystem in which electronic transactions and physical cash continue to coexist.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) showed that instant payment transactions reached approximately N1.07 quadrillion in 2024, up from N600.36 trillion in 2023, representing growth of nearly 80% in transaction value.
These transactions are processed through the NIBSS Instant Payment (NIP) platform, which enables customers to transfer money between participating banks and financial institutions in real time, including through mobile banking applications and fintech platforms.
The growth reflects the increasing scale of electronic financial activity, although the transaction values represent money transferred over a period rather than the amount of money held in digital accounts.
The expansion has been supported by digital banks, mobile money operators and payment companies such as OPay, PalmPay and Moniepoint, which provide alternatives to conventional banking channels.
