The Central Bank of Nigeria (CBN) says credit availability improved across key lending segments in the fourth quarter of 2025, even as lenders recorded higher default rates on loans to households and businesses.
The apex bank disclosed this in its Q4 2025 Credit Conditions Survey, noting that overall lending conditions showed mixed outcomes, with banks cautiously expanding access to credit despite rising repayment risks.
According to the CBN, credit trends during the quarter reflected both opportunities and challenges for borrowers and lenders, underscoring the complexity of Nigeria’s financial landscape.
The survey showed that households faced higher borrowing costs, while corporate borrowers experienced mixed pricing conditions. Spreads on secured and unsecured household loans widened to -10.8 and -2.0 index points, respectively, relative to the Monetary Policy Rate (MPR), indicating tighter and more expensive credit for households.
For corporate loans, spreads narrowed for small businesses (14.8), large private non-financial corporations (PNFCs) (2.9), and other financial corporations (OFCs) (4.3). However, medium-sized PNFCs recorded a widening spread of -4.8 index points, reflecting tighter pricing conditions for that segment.
Lenders also reported increases in loan defaults across secured, unsecured, and corporate lending categories, pointing to persistent repayment challenges. The CBN said the data suggest that while credit supply improved in some sectors, heightened default rates continue to pose risks to overall loan performance.
Earlier this month, the CBN reported that private sector credit rose to ₦74.63 trillion in November 2025, signalling an early rebound in lending activity following the bank’s September policy rate cut. The figure represents a marginal increase from ₦74.41 trillion recorded in October.
The CBN noted that while tight monetary conditions constrained lending for most of the year, easing policy signals are beginning to stabilise credit flows to businesses and households.
Previous CBN reports have shown that households often face constrained borrowing due to elevated interest rates and limited disposable income. In contrast, corporate lending has generally benefited from targeted policy measures and liquidity support, particularly for large and small PNFCs.
The bank added that ongoing macroeconomic pressures, including inflation and rising operational costs for businesses, have continued to influence loan performance and default trends.
The Q4 2025 findings indicate cautious optimism among lenders as they expand credit while closely monitoring repayment challenges. According to the survey, higher credit availability for secured and corporate loans was driven by shifting economic outlooks and strategic market positioning.
Growth in unsecured lending was linked to changes in economic expectations and adjustments in the cost and availability of funds.
The CBN stressed that these developments reflect the delicate balance banks face between supporting economic growth and managing heightened credit risk.
In September 2025, the CBN’s Monetary Policy Committee (MPC) cut the Monetary Policy Rate by 50 basis points to 27 per cent. In November, the MPC retained the MPR at 27 per cent but adjusted the interest rate corridor.
