Nigeria’s consumer credit recorded its first decline in six years, falling by 19.89 per cent to N3.78tn in 2025 from N4.72tn in 2024, as high interest rates reduced household borrowing, according to the Central Bank of Nigeria (CBN).
The decline was disclosed in the CBN’s 2025 Annual Report and Statement of Accounts, ending a period of uninterrupted growth that began in December 2019. The apex bank attributed the contraction to the prevailing high-interest-rate environment, which weakened consumer borrowing across the banking sector.
According to the report, the overall decline was driven largely by a sharp fall in personal loans, despite strong growth in retail lending during the year. The shift also changed the composition of consumer credit, with retail loans becoming the largest component of outstanding consumer lending.
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 the remaining 48.84 per cent.
Consumer lending also accounted for a smaller share of banks’ total credit to the private sector. It represented 6.60 per cent of total private sector credit extended by other depository corporations in 2025, compared with 7.98 per cent in 2024.
“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 said.
The report also highlighted changes in the maturity structure of banks’ loan portfolios. Short-term loans remained the largest category, accounting for 51.60 per cent of total credit, although their share declined by 7.71 percentage points from the previous year.
Medium-term credit accounted for 13.46 per cent of total lending, down slightly by 0.11 percentage points, while long-term credit increased significantly, rising by 7.82 percentage points to 34.94 per cent.
The CBN said the dominance of short-term lending reflected banks’ practice of matching loan tenures with their predominantly short-term deposit base. It added that the increase in long-term lending signalled a gradual shift in lending patterns during the year.
On the liabilities side, deposits with maturities of one year or less continued to dominate banks’ funding profile. Short-term deposits accounted for 91 per cent of total deposit liabilities in 2025, compared with 90.09 per cent in 2024. Medium-term deposits rose to 5.15 per cent, while long-term deposits declined sharply to 3.85 per cent from 7.28 per cent.
Overall, the report showed that although consumer credit contracted in 2025, lending shifted towards retail borrowing, while long-term loans occupied a larger share of banks’ credit portfolios.
Meanwhile, credit to the private sector continued to grow despite the tight monetary environment. Earlier CBN data showed private sector credit increased 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 came even as the Monetary Policy Committee retained the Monetary Policy Rate (MPR) at 26.50 per cent, maintaining its tight monetary policy stance aimed at curbing inflation.
