Faced with persistent macroeconomic pressures, Nigerian consumers are relying more heavily on bank-issued personal lines of credit.
According to the latest Economic Report from the Central Bank of Nigeria (CBN), outstanding personal loans climbed to ₦1.96 trillion. This surge means personal lending now accounts for more than half (51.44%) of all consumer credit in the country, highlighting a significant structural shift in retail banking portfolios.
Inside the Consumer Credit Balance Sheet
The apex bank’s data shows that while overall consumer credit grew by a modest 0.79%, rising to ₦3.81 trillion, the internal dynamics of this lending changed drastically:
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Personal Loans: Surged by 5.95%, jumping from ₦1.85 trillion to ₦1.96 trillion.
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Retail Loans: Dropped by 4.15%, slipping to ₦1.85 trillion to make up the remaining 48.56% of the consumer lending pool.
This shift indicates that banks are prioritizing direct-to-consumer personal loans over traditional retail facility financing.
Where the Money Flows: A Sectoral Breakdown
Beyond individual consumer lines, total systemic credit across the entire Nigerian economy edged up slightly by 0.17%, reaching a total of ₦57.41 trillion. However, the distribution of these funds remains highly uneven across the real economy.
The services sector remains the dominant beneficiary of institutional banking, capturing ₦32.86 trillion of the total credit pool. Within this segment, financial and capital market activities absorbed ₦9.16 trillion, while trade and commerce secured ₦5.54 trillion.
In contrast, productive sectors saw mixed results. While agricultural credit grew by 2.77% to hit ₦3.81 trillion, credit to the industrial sector fell by 0.24%. Within industry, manufacturing led with ₦6.37 trillion, followed by construction at ₦2.44 trillion, and power infrastructure projects at ₦1.59 trillion.
Liquidity Tightening Amid Steady SME Signs
The apex bank’s report also points to a broader liquidity contraction. Nigeria’s broad money supply shrank by 1.5%, a direct result of ongoing monetary tightening policies and a dip in net foreign assets.
Despite these tighter market conditions, CBN Governor Olayemi Cardoso shared some positive news following the 305th Monetary Policy Committee (MPC) meeting. He revealed that fresh lending to Small and Medium Enterprises (SMEs) is starting to pick up, rising from ₦153 billion to ₦199 billion.
Cardoso emphasized that sustaining this SME lending momentum cannot be achieved by monetary policy alone. It requires structured, cross-institutional partnerships between fiscal bodies, the Ministry of Industry, Trade and Investment, and development finance institutions like the Bank of Industry (BOI).
