Nigeria’s outstanding consumer credit fell by 19.89 per cent to N3.78 trillion in 2025, marking the first annual decline in six years, the Central Bank of Nigeria (CBN) has disclosed.
The figure dropped from N4.72 trillion recorded in the preceding period, according to the CBN’s 2025 Annual Report and Statement of Accounts.
The apex bank attributed the contraction to the prevailing interest rate environment and shifts in the composition of bank lending.
The decline was driven largely by a sharp reduction in personal loans, which fell to N1.85 trillion during the year.
However, retail lending moved in the opposite direction, rising by 63.77 per cent to N1.94 trillion. The increase pushed retail loans to 51.16 per cent of total outstanding consumer credit, surpassing personal loans, which accounted for 48.84 per cent.
The CBN said the decline in consumer credit was the first recorded since December 2019.
The share of consumer credit in total credit to the private sector provided by other depository corporations also fell to 6.60 per cent in 2025, from 7.98 per cent in 2024.
The latest figures point to a significant shift in the structure of consumer lending, as banks increasingly extended retail loans even as personal lending contracted sharply.
The CBN report also showed that short-term credit remained the largest component of the assets portfolio of other depository corporations, accounting for 51.60 per cent, although its share declined by 7.71 percentage points during the year.
Medium-term credit fell marginally to 13.46 per cent, while long-term credit increased by 7.82 percentage points to 34.94 per cent.
According to the apex bank, the dominance of short-term loans and advances reflects banks’ preference for aligning short-term lending with the maturity structure of their deposit liabilities.
Deposit liabilities with maturities of one year or less continued to dominate in 2025, rising marginally to 91 per cent from 90.09 per cent in 2024.
Medium-term deposit liabilities increased to 5.15 per cent from 2.63 per cent, while long-term deposit liabilities declined to 3.85 per cent from 7.28 per cent.
The contraction in consumer credit comes despite broader growth in lending to Nigeria’s private sector. Private-sector credit reportedly rose to N83.26 trillion in June 2026 from N81.04 trillion in May, representing a 9 per cent increase compared with N76.13 trillion recorded in June 2025.
The development underscores the uneven impact of Nigeria’s high-interest-rate environment on different segments of the credit market, with overall private-sector lending expanding while consumer credit recorded its first decline in six years.
Source: (nairametrics.com)
