Nigeria's Consumer Credit Declines for First Time Since 2019

Nigeria's consumer credit market experienced its first contraction since December 2019, with outstanding consumer loans decreasing by 19.89% to N3.78 trillion in 2025 from N4.72 trillion in 2024, according to the Central Bank of Nigeria (CBN). This decline reflects the impact of prolonged high-interest rates on household borrowing.

The CBN indicated that rising borrowing costs and shifts in banks' lending practices discouraged personal borrowing while promoting retail lending. Personal loans fell sharply to N1.85 trillion, contributing significantly to the overall contraction.

Conversely, retail loans increased by 63.77% to N1.94 trillion, representing 51.16% of total consumer credit for the first time in several years. The report also noted a decrease in consumer credit's share of total credit extended to the private sector, dropping to 6.60% in 2025 from 7.98% in the previous year.

Additionally, short-term credit remained the largest component of banks' asset portfolios, accounting for 51.60%, despite a decline of 7.71 percentage points during the year.