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From Adanna Nnamani, Abuja
Nigeria’s outstanding consumer credit dropped to N3.78 trillion in 2025, marking its first decline in six years as high interest rates discouraged borrowing, according to the Central Bank of Nigeria (CBN).
The apex bank disclosed this in its 2025 Annual Report and Statement of Accounts, revealing that consumer credit fell by 19.89 per cent from N4.72 trillion recorded in 2024.
According to the CBN, the contraction was largely driven by a sharp decline in personal loans, even though retail lending recorded strong growth during the year.
The report stated: “Consumer credit outstanding moderated, in response to the dynamic interest rate environment. Consumer credit outstanding fell by 19.89 per cent to N3,783.40 billion in 2025, from N4,722.93 billion in the preceding period. The fall was the first since December 2019.”
The bank explained that personal loans declined significantly to N1.85 trillion, reflecting the impact of the high interest rate environment on borrowing by households.
In contrast, retail loans grew by 63.77 per cent to N1.94 trillion, making up 51.16 per cent of total consumer credit for the first time in many years. Personal loans accounted for the remaining 48.84 per cent.
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The CBN also disclosed that consumer credit’s share of total credit to the private sector declined to 6.6 per cent in 2025 from 7.98 per cent in the previous year, indicating that household borrowing slowed relative to overall lending by banks.
The report further showed that short-term lending remained dominant in banks’ loan portfolios, although its share fell during the year.
Short-term credit accounted for 51.6 per cent of total loans, down by 7.71 percentage points from 2024. Medium-term credit also slipped slightly to 13.46 per cent, while long-term credit rose by 7.82 percentage points to 34.94 per cent.
According to the CBN, banks continued to favour short-term lending because most customer deposits are also short-term, making it easier to match assets with liabilities.
On the funding side, deposit liabilities with maturities of one year or less remained dominant, accounting for 91 per cent of total deposits in 2025, up from 90.09 per cent in 2024.
Medium-term deposits rose to 5.15 per cent, while long-term deposits declined to 3.85 per cent from 7.28 per cent recorded a year earlier.
The report suggests that while overall consumer borrowing weakened in 2025 due to elevated interest rates, banks increasingly shifted their focus toward retail lending, even as longer-term loans gained a larger share of total credit.
