- Nigeria’s consumer credit fell by 19.89% in 2025
- The CBN attributed the decline to high interest rates
- Retail loans grew despite the overall drop in consumer lending
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 discouraged household borrowing, according to the Central Bank of Nigeria (CBN).
Eko Hot Blog gathered that the decline was revealed in the apex bank’s 2025 Annual Report and Statement of Accounts, ending a steady growth trend that had continued since December 2019. The CBN attributed the contraction to the prevailing interest rate environment, which influenced borrowing behaviour across the banking sector.
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Despite the overall decline, retail lending expanded significantly during the year, altering the composition of consumer credit. Retail loans rose by 63.77 per cent to N1.94tn, making up 51.16 per cent of total consumer credit, while personal loans dropped to N1.85tn, accounting for the remaining 48.84 per cent.
The report also showed that consumer credit represented a smaller share of banks’ lending to the private sector. Its contribution declined to 6.60 per cent of total private sector credit in 2025, compared with 7.98 per cent in the previous year.
According to the CBN, “Consumer credit outstanding moderated in response to the dynamic interest rate environment. Consumer credit outstanding fell 19.89 per cent to N3.78tn in 2025 from N4.72tn in the preceding period. The fall was the first since December 2019.”
The report further highlighted changes in banks’ lending patterns. Short-term loans remained the largest component of total credit, accounting for 51.60 per cent, although their share declined by 7.71 percentage points compared with 2024.
Medium-term credit slipped slightly to 13.46 per cent, while long-term lending expanded considerably, increasing by 7.82 percentage points to account for 34.94 per cent of total credit.
The CBN explained that banks continued to favour short-term lending because of the structure of their deposit base, which is largely short-term. However, the increase in long-term credit suggests lenders gradually adjusted their lending strategies during the year.
On the funding side, deposits with maturities of one year or less remained dominant, accounting for 91 per cent of total deposit liabilities in 2025, up from 90.09 per cent in 2024. Medium-term deposits rose to 5.15 per cent, while long-term deposits fell sharply to 3.85 per cent from 7.28 per cent.
Overall, the report indicated that although consumer credit contracted in 2025, retail lending gained prominence, while long-term loans accounted for a larger share of banks’ credit portfolios.
Meanwhile, credit to the private sector continued to expand despite the tight monetary policy stance. Earlier CBN data showed private sector credit increased to N83.2tn in June 2026, up from N81.04tn in May and N76.13tn recorded in June 2025.
The increase came as the Monetary Policy Committee (MPC) maintained the benchmark Monetary Policy Rate (MPR) at 26.50 per cent, keeping borrowing costs high in an effort to curb inflation.
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