Nigeria’s consumer credit fell by 19.89 per cent to N3.78tn in 2025 from N4.72tn recorded a year earlier, marking the first decline in six years as elevated interest rates weakened household borrowing.
The decline was disclosed in the Central Bank of Nigeria’s 2025 Annual Report and Statement of Accounts, which linked the contraction to the prevailing interest rate environment and its impact on borrowing patterns across the banking sector.
According to the apex bank, the decline ended a growth streak in consumer credit that had continued since December 2019.
“Consumer credit outstanding moderated in response to the dynamic interest rate environment. Consumer credit outstanding fell 19.89 per cent to N3,783.40bn in 2025 from N4,722.93bn in the preceding period. The fall was the first since December 2019,” the CBN stated.
Despite the overall contraction in consumer credit, retail lending recorded significant growth during the year.
Retail loans rose by 63.77 per cent to N1.94tn in 2025, accounting for 51.16 per cent of total consumer credit.
Personal loans, however, declined to N1.85tn, representing 48.84 per cent of the consumer credit portfolio.
The shift means retail credit overtook personal loans as the largest component of outstanding consumer credit in 2025.
Consumer lending also accounted for a smaller share of banks’ overall credit exposure to the private sector.
The CBN reported that consumer credit represented 6.60 per cent of total private sector credit extended by other depository corporations in 2025, down from 7.98 per cent in 2024.
The CBN report also highlighted changes in the maturity structure of banks’ loan portfolios.
Short-term credit remained the dominant category, accounting for 51.60 per cent of total credit in 2025. However, its share fell by 7.71 percentage points from the previous year.
Medium-term credit also edged down to 13.46 per cent, representing a decline of 0.11 percentage points.
Long-term credit, on the other hand, increased significantly, rising by 7.82 percentage points to account for 34.94 per cent of total credit.
The apex bank attributed the dominance of short-term lending to banks’ strategy of matching loan maturities with their largely short-term deposit base.
It noted that the increase in long-term credit reflected a gradual adjustment in banks’ lending profiles during the year.
On the liability side, deposits with maturities of one year or less continued to dominate banks’ deposit liabilities.
Short-term deposits accounted for 91 per cent of total deposit liabilities in 2025, slightly higher than the 90.09 per cent recorded in 2024.
Medium-term deposits increased to 5.15 per cent, while long-term deposits declined sharply to 3.85 per cent from 7.28 per cent in the previous year.
Despite the contraction in consumer lending, overall credit to Nigeria’s private sector continued to expand.
CBN data showed that private sector credit rose to N83.2tn in June 2026 from N81.04tn in May, representing a nine per cent increase from N76.13tn recorded in June 2025.
The growth occurred despite the CBN’s tight monetary policy stance, with the Monetary Policy Committee retaining the benchmark Monetary Policy Rate at 26.50 per cent.
The high-interest rate environment is part of the apex bank’s efforts to contain inflation, but it has also affected household borrowing patterns and the cost of accessing credit.
Overall, the CBN’s 2025 report shows that Nigeria’s consumer credit market contracted significantly during the year, even as its composition shifted towards retail lending and banks increased the share of long-term credit in their portfolios.
