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Consumer Credit Contracts to ₦3.8trn, First Decline Since 2019 – CBN
Nigeria’s outstanding consumer credit fell by 19.89% to ₦3.78 trillion in 2025, down from ₦4.72 trillion in 2024.
This marks the first decline since December 2019, according to the Central Bank of Nigeria’s 2025 Annual Report and Statement of Accounts.
The CBN attributed the contraction to the prevailing high-interest rate environment and shifts in the composition of bank lending.
“Consumer credit outstanding moderated in response to the dynamic interest rate environment. The fall was the first since December 2019,” the apex bank stated.
The decline was driven largely by a sharp drop in personal loans, which fell to ₦1.85 trillion. In contrast, retail loans surged by 63.77% to ₦1.94 trillion, accounting for 51.16% of total consumer credit for the first time in years. Personal loans made up the remaining 48.84%.
As a result, consumer credit’s share of total private sector lending fell to 6.60% in 2025, down from 7.98% in 2024.
On loan tenors, short-term credit continued to dominate banks’ asset portfolios at 51.60%, though this was 7.71 percentage points lower than the previous year. Medium-term credit declined slightly to 13.46%, while long-term credit rose significantly by 7.82 percentage points to 34.94%.
The CBN explained that the dominance of short-term loans reflects banks’ preference for matching lending with short-term deposit liabilities. Deposit maturity structures also shifted: short-term deposits rose marginally to 91%, medium-term deposits increased to 5.15%, and long-term deposits fell to 3.85% from 7.28%.
Despite the decline in consumer credit, overall credit to the private sector grew to ₦83.26 trillion in June 2026, up 9% year-on-year from ₦76.13 trillion. This came as the CBN retained the Monetary Policy Rate at 26.50%, keeping borrowing costs elevated.
The contraction in consumer credit underscores the impact of Nigeria’s tight monetary environment, with households facing reduced access to personal loans even as retail lending expands.
