ABUJA, Nigeria (VOICE OF NAIJA)-Nigeria’s consumer credit recorded its first decline in six years, dropping by 19.89 per cent to N3.78tn in 2025 from N4.72tn in 2024, as high interest rates curtailed household borrowing, according to the Central Bank of Nigeria (CBN).
The contraction was revealed in the CBN’s 2025 Annual Report and Statement of Accounts, marking the end of a growth trend that had been sustained since December 2019.
The apex bank attributed the decline to the prevailing high-interest-rate environment, which influenced borrowing patterns across the banking sector.
Data from the report showed that the decline was mainly driven by a sharp reduction in personal loans, even as retail lending recorded strong growth during the year.
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This development altered the composition of consumer lending, with retail loans surpassing personal loans to become the largest component of outstanding consumer credit.
According to the report, retail loans rose by 63.77 per cent to N1.94tn in 2025, accounting for 51.16 per cent of total consumer credit. Personal loans, however, declined to N1.85tn, representing the remaining 48.84 per cent.
The CBN also noted that consumer credit accounted for a smaller share of banks’ total lending to the private sector.
Consumer loans represented 6.60 per cent of total private sector credit extended by other depository corporations in 2025, compared to 7.98 per cent recorded in 2024.
“Consumer credit outstanding moderated in response to the dynamic interest rate environment.
Consumer credit outstanding fell 19.89 per cent to N3,783.40bn in 2025 from N4,722.93bn in the preceding period. The fall was the first since December 2019,” the CBN said.
Beyond consumer lending, the report highlighted changes in the maturity structure of banks loan portfolios.
Short-term loans remained the largest category, accounting for 51.60 per cent of total credit, although their share declined by 7.71 percentage points from the previous year.
Medium-term credit also recorded a slight decline, accounting for 13.46 per cent of total lending, down by 0.11 percentage points.
In contrast, long-term credit increased significantly, with its share rising by 7.82 percentage points to 34.94 per cent.
The apex bank explained that the dominance of short-term lending reflected banks’ strategy of matching loan tenures with their largely short-term deposit base.
It added that the growth in long-term lending indicated a gradual shift in banks’ lending patterns during the year.
On the deposit side, liabilities with maturities of one year or less continued to dominate.
Short-term deposits made up 91 per cent of total deposit liabilities in 2025, up slightly from 90.09 per cent in 2024.
Medium-term deposits accounted for 5.15 per cent, while long-term deposits fell sharply to 3.85 per cent from 7.28 per cent recorded a year earlier.
Overall, the report showed that although total consumer credit declined in 2025, lending activity shifted toward retail borrowing, while long-term loans gained a larger share of banks’ credit portfolios.
Separately, credit to the private sector continued to grow despite the tight monetary environment.
Earlier CBN data indicated that private sector credit rose to N83.2tn in June 2026 from N81.04tn in May, representing a nine per cent increase compared to N76.13tn recorded in June 2025.
The expansion came despite the Monetary Policy Committee’s decision to retain the benchmark Monetary Policy Rate at 26.50 per cent as part of efforts to keep inflation under control.