Nigeria: Personal Loans Rise to N1.96tn as Consumer Credit Expands in Nigeria

Personal loans extended by Nigerian banks climbed to ₦1.96 trillion in January 2026, accounting for more than half of the country’s total consumer credit, according to the latest Economic Report released by the Central Bank of Nigeria (CBN).

The report showed that total consumer credit outstanding rose marginally by 0.79 per cent to ₦3.81 trillion in January, up from ₦3.78 trillion recorded in December 2025, with growth driven entirely by increased personal lending.

According to the apex bank, personal loans rose by 5.95 per cent to ₦1.96 trillion from ₦1.85 trillion in the previous month, representing 51.44 per cent of total consumer credit.

“Consumer credit outstanding increased by 0.79 per cent to ₦3.81 trillion from ₦3.78 trillion in the preceding month. The increase in consumer credit was due solely to the rise in personal loans,” the CBN stated in the report.

In contrast, retail loans declined by 4.15 per cent to ₦1.85 trillion from ₦1.93 trillion in December, accounting for the remaining 48.56 per cent of total consumer lending.

The increase in personal borrowing comes amid a modest expansion in overall credit to the Nigerian economy. Data from the CBN showed that total credit rose slightly by 0.17 per cent to ₦57.41 trillion in January, compared to ₦57.32 trillion in the previous month.

The central bank attributed the growth primarily to increased lending to the agriculture and services sectors, even as credit to industry weakened during the review period.

“The growth was driven primarily by the 0.12 per cent and 2.77 per cent increase in credit to the services and agriculture sectors, respectively. Credit to the industry sector, however, declined by 0.24 per cent,” the report noted.

Sectoral analysis revealed that the services sector remained the largest beneficiary of bank lending, accounting for 56.98 per cent of total credit allocation. The industry sector followed with 36.55 per cent, while agriculture represented 6.47 per cent.

Credit to agriculture increased to ₦3.81 trillion in January from ₦3.71 trillion in December, while lending to the services sector rose to ₦32.86 trillion from ₦32.71 trillion. Credit to industry stood at ₦21.21 trillion.

Within the services segment, financial services, insurance, and capital market activities attracted ₦9.16 trillion in credit, while trade and general commerce accounted for ₦5.54 trillion.

Manufacturing remained the largest recipient within industrial lending, attracting ₦6.37 trillion, followed by construction at ₦2.44 trillion and power and energy at ₦1.59 trillion.

Despite the rise in consumer lending, the report indicated tighter liquidity conditions in the banking system, with broad money supply contracting by 1.50 per cent in January due largely to a decline in net foreign assets.

Nonetheless, the CBN maintained that the banking sector remained resilient, with prudential indicators staying within regulatory thresholds.

Speaking after the 305th meeting of the Monetary Policy Committee (MPC), CBN Governor Olayemi Cardoso noted that credit to small and medium-sized enterprises (SMEs) had started showing signs of improvement.

According to him, new SME credit increased to about ₦199 billion in April 2026 from ₦153 billion in March, particularly within the retail segment.

Cardoso disclosed that the general category accounted for 94.73 per cent of new credit facilities, while general commerce represented 2.46 per cent.

He stressed that improving SME financing extends beyond the responsibility of the central bank alone, noting that institutions such as the Ministry of Industry, Trade and Investment, the Bank of Industry, and other fiscal authorities also play important roles in strengthening access to finance.

The MPC, however, retained the Monetary Policy Rate at 26.5 per cent, citing persistent inflationary pressures, rising global uncertainties, and the need to maintain exchange rate stability.

According to the latest Consumer Price Index report released by the National Bureau of Statistics, Nigeria’s headline inflation rose for the second consecutive month to 15.69 per cent in April 2026, from 15.38 per cent in March.

Food inflation also climbed to 16.06 per cent from 14.31 per cent, driven largely by higher transportation and logistics costs alongside seasonal supply pressures, while core inflation eased slightly to 15.86 per cent from 16.21 per cent.

Reacting to the MPC’s decision, the President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, expressed disappointment over the retention of interest rates, arguing that lower borrowing costs are critical to supporting struggling businesses.

“Many of us were very hopeful that the interest rate would come down. We believe that lowering the interest rate will go a long way to support more access to funding for SMEs and also make it more affordable,” he said.

Egbesola warned that maintaining elevated borrowing costs could further intensify pressures on businesses and households already grappling with inflation, rising energy costs, and broader economic uncertainty.