Demand for corporate and secured loans increased in the second quarter of 2026 as Nigerian banks expanded credit supply and recorded lower default rates across major lending categories, according to the Central Bank of Nigeria (CBN).
The apex bank disclosed this in its latest Credit Conditions Survey, which showed that lenders eased credit conditions for corporate, secured and unsecured loans during the period.
The report also revealed that banks approved a higher proportion of loan applications in the quarter, reflecting improved confidence in borrowers and the broader economic environment.
According to the CBN, credit availability increased across all major lending categories in the second quarter of 2026.
Secured lending recorded an increase of 25.2 index points, while corporate lending rose by 20.4 index points and unsecured lending increased by 10.5 index points.
Demand for secured loans also improved, rising to 15.1 index points, while corporate loan demand increased to 15.2 index points. However, demand for unsecured loans remained weak at -1.2 index points.
The report showed that banks recorded higher loan approval rates across secured, unsecured and corporate lending segments compared with the previous quarter.
The apex bank added that default rates declined across secured lending, unsecured lending and all categories of corporate borrowers, including small businesses, medium and large private non-financial corporations (PNFCs), and other financial corporations (OFCs).
The CBN said all lending categories recorded stronger demand during the quarter, except borrowing by other financial corporations, which remained largely unchanged.
The increase in secured lending was attributed to improving economic conditions, banks’ efforts to expand market share and stronger liquidity conditions within the banking sector.
The survey also showed that interest rate spreads narrowed across most lending categories during the period.
The spread on unsecured household lending relative to the Monetary Policy Rate (MPR) narrowed to 7.8 index points.
For corporate lending, spreads narrowed to 14.0 index points for other financial corporations, 5.0 index points for medium-sized private non-financial corporations and 4.7 index points for large private non-financial corporations.
However, the spread for small businesses widened to -3.8 index points, while the spread on secured household lending widened by -4.5 index points relative to the MPR.
Meanwhile, credit to Nigeria’s private sector increased to N83.26 trillion in June 2026 from N81.04 trillion in May, representing a 2.74 per cent month-on-month growth, according to CBN data.
The data also showed that credit to government declined slightly to N40.03 trillion from N40.38 trillion during the period.
The CBN had earlier reported that consumer credit outstanding declined by 19.89 per cent to N3.78 trillion in 2025 from N4.72 trillion recorded in the previous period.
The apex bank attributed the decline to changing interest rate conditions.
The Monetary Policy Committee of the CBN recently retained the Monetary Policy Rate at 26.5 per cent after its 305th meeting.
Despite the improvement in overall credit conditions, concerns remain over lending to some productive sectors.
The Manufacturers Association of Nigeria recently raised concerns that bank credit to the manufacturing sector declined by N1.92 trillion, falling from N8.53 trillion in December 2024 to N6.61 trillion in December 2025.
The CBN Credit Conditions Survey provides an assessment of banks’ lending behaviour, including changes in credit availability, loan demand, pricing, approval rates and default levels across households and businesses.
Private sector groups, including the Centre for the Promotion of Private Enterprise, have warned against further interest rate increases, arguing that tighter monetary policy could slow economic recovery and increase pressure on businesses and households.
With inflation remaining elevated and election-related spending expected to rise in coming months, analysts believe policymakers may continue to prioritise economic stability over aggressive monetary easing.
