By Chinwendu Obienyi
The services sector has maintained a top position in the total credit utilisation landscape, as confirmed by data from the Central Bank of Nigeria (CBN).
According to the bank’s economic report for the fourth quarter (Q4) of 2024, the credit that was advanced to the agriculture and services sectors increased by 23.38 and 5.15 per cent to N2.85 trillion and N32.69 trillion, respectively, compared with their levels at end-September 2024.
Similarly, the total credit utilised among key sectors rose by 1.11 per cent to N59.21 trillion at end-December 2024, compared with N58.57 trillion at end-September 2024.
The figure recorded in the services sector highlights the sector dominance in credit utilization, accounting for over half of total credit disbursed.
This growth in credit utilization highlights the resilience of key sectors and the critical role of financial policies in supporting Nigeria’s economic development amidst challenges such as inflation and exchange rate pressures.
Conversely, credit utilised by industry declined by 5.96 per cent to N23.67 trillion, from N25.17 trillion in the preceding quarter. The services sector utilised most credit at 55.21 per cent followed by industry and agriculture, which accounted for 39.97 and 4.82 per cent, respectively.
Credit to the agricultural sector has shown steady growth over the years, with increased funding contributing positively to agricultural output. However, agriculture still receives a smaller share of total bank loans compared to other sectors like oil and gas or manufacturing.
Furthermore, consumer credit outstanding rose by 11.06 per cent to N4.72 trillion at end-December 2024, from N4.25 trillion at end-September 2024. Personal loan increased by 21.27 per cent to N3.82 trillion compared with the level at end-September 2024.
Retail loan, however, declined by 18.18 per cent to N0.90 trillion from N1.10 trillion at end September 2024. A breakdown indicated that personal loans, with a share of 80.98 per cent, remained dominant, while retail loans accounted for the balance.
Despite rising interest rates, private sector borrowing remains robust. By November 2024, private sector credit reached N75.96 trillion, reflecting a 27.3 per cent year-on-year increase from N59.69 trillion in November 2023.
Reacting to the report, financial analysts noted that service sector’s dominance in credit utilization reflects Nigeria’s shift toward a more service-oriented economy.
They added that service-sector firms (especially in fintech and logistics) should explore international partnerships to capitalize on digital trade opportunities.