Nigeria’s consumer credit falls to N3.8 trillion, first decline in six years

Consumer credit outstanding fell by 19.89% to N3.78 trillion in 2025 from N4.72 trillion in the preceding period, marking the first decline since December 2019, according to the Central Bank of Nigeria (CBN).

The apex bank disclosed this in its 2025 Annual Report and Statement of Accounts, attributing the decline to the dynamic interest rate environment.

The report showed that the contraction was driven by a sharp decline in personal loans, even as retail lending recorded strong growth during the year.

The shift also changed the composition of consumer credit, with retail loans accounting for more than half of outstanding consumer credit for the first time in a long period.

What the report is saying

CBN attributed the decline in consumer lending to the prevailing high interest rate environment and changes in the composition of bank lending.

According to the apex bank, this is the first decline since December 2019.

• “Consumer credit outstanding moderated, in response to the dynamic interest rate environment. Consumer credit outstanding fell by 19.89 per cent to N3,783.40 billion in 2025, from N4,722.93 billion in the preceding period. The fall was the first since December 2019,”the apex bank stated

The CBN said the decline was driven largely by a sharp fall in personal loans, which dropped to N1.85 trillion.

In contrast, retail loans rose by 63.77% to N1.94 trillion, making up 51.16% of total consumer credit, while personal loans accounted for the remaining 48.84%.

The CBN also noted that consumer credit’s share of total credit to the private sector provided by other depository corporations fell to 6.60% in 2025 from 7.98% in 2024.

More Insights

The apex bank noted that short-term credit continued to dominate the assets portfolio of other depository corporations, although its share declined during the year.

• Short-term credit accounted for 51.60% of the portfolio, 7.71 percentage points lower than the preceding period, the report stated.
• The apex bank noted that medium-term credit declined slightly by 0.11 percentage points to 13.46%.
• The report further stated that long-term credit increased by 7.82 percentage points to 34.94%.

The CBN said the dominance of short-term loans and advances reflected banks’ preference for matching short-term lending with short-term deposit liabilities.

The shift towards longer-term credit occurred alongside changes in the maturity structure of deposit liabilities during the year.

• The CBN said deposit liabilities with maturities of one year and below continued to dominate the portfolio of other depository corporations in 2025.
• Short-term deposit liabilities increased marginally by 0.91 percentage points to 91.00% from 90.09% in 2024.
• Medium-term deposit liabilities also increased by 2.52 percentage points to 5.15%, while long-term deposit liabilities declined to 3.85% from 7.28%.

The CBN’s report therefore showed a decline in overall consumer credit during 2025, alongside a significant shift in its composition, as retail loans increased while personal loans contracted sharply.

The report also showed that although short-term credit remained the largest component of the assets portfolio, long-term credit gained a larger share during the year.

What you should know

Nairametrics reported earlier that credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May.

Year-on-year, the figure represents a 9% increase compared with the N76.13 trillion recorded in June 2025.

The increase in private sector credit comes against the backdrop of the CBN’s decision to retain the Monetary Policy Rate at 26.50%.

(Nairametrics)