Banks operating in Nigeria have reported a broad rise in loan defaults across both households and businesses, signaling growing stress in the nation’s credit market. This comes even as loan supply improves and demand for credit continues to rise.
According to the Central Bank of Nigeria’s Credit Conditions Survey for Q4 2025, lenders recorded higher default rates across secured, unsecured, and corporate loans during the review period. The findings suggest worsening repayment capacity among borrowers, with high interest rates, weak consumer incomes, and rising operating costs weighing heavily on economic activity.
“Lenders reported higher default rates for secured, unsecured, and all corporate lending types in Q4 2025,” the report stated.
The survey highlights that default rates on secured loans rose to a net balance of minus 2.2 points, improving slightly from deeper negative readings seen in 2023 and early 2024. However, banks emphasized that repayment challenges persist, even for loans backed by collateral, reflecting the depth of financial strain on borrowers.
Meanwhile, unsecured household lending deteriorated further, recording a net default balance of minus 3.0 points, underscoring mounting pressures on household finances.
