A new survey by the Central Bank of Nigeria (CBN) has revealed that Nigerian banks recorded increased default rates on secured loans in the third quarter of 2025 (Q3’25).
In a surprising twist, the survey titled Credit Condition Survey showed that default rates on unsecured loans actually declined during the same period. The report was released by the CBN on Thursday.
According to the apex bank, lenders observed higher credit availability in Q3 2025 compared to the previous quarter. The improvement was attributed to changing economic outlooks for secured and corporate lending, while changing risk appetite was the dominant factor for increased unsecured credit access.
The survey stated:
“Lenders reported a decrease in default rates for unsecured lending while experiencing an increase in default rates for secured lending during the review quarter.”
On corporate loan performance, the report noted that small businesses, medium-sized Private Non-Financial Corporations (PNFCs), large PNFCs, and Other Financial Corporations (OFCs) all recorded lower default rates.
The CBN added that lenders approved more applications in Q3 2025 across secured, unsecured and corporate lending categories, reflecting broader market confidence during the period.
Regarding interest rate behaviour, the report highlighted that:
- Spreads on secured and unsecured household loan rates relative to the Monetary Policy Rate (MPR) widened by -0.1 and -1.8, respectively.
- For corporate lending, spreads relative to MPR narrowed for medium PNFCs and OFCs by 2.6 and 14.4 index points, respectively.
- However, spreads widened for small businesses and large PNFCs at -0.8 and -0.4 index points.
The report suggests a dynamic lending environment in Q3 2025, with increased access to credit but also evolving risk patterns, especially in secured lending.
