Nigeria’s consumer credit contracted for the first time in six years in 2025, declining by 19.89 per cent to N3.78 trillion as elevated borrowing costs discouraged households from taking loans, according to the Central Bank of Nigeria.
The development, contained in the apex bank’s 2025 Annual Report and Statement of Accounts, ended a growth streak that had persisted since December 2019, underscoring the impact of the CBN’s tight monetary policy on household borrowing.
Outstanding consumer credit fell from N4.72 trillion in 2024 to N3.783 trillion in 2025, with the central bank attributing the decline to the prevailing high interest rate environment.
“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.
Although total consumer lending declined, the composition of borrowing changed significantly during the year.
Retail loans jumped 63.77 per cent to N1.94 trillion, accounting for 51.16 per cent of total consumer credit and overtaking personal loans as the largest segment of household lending.
Personal loans fell to N1.85 trillion, representing 48.84 per cent of the consumer credit portfolio.
The report also showed that consumer lending accounted for a smaller share of banks’ overall exposure to the private sector. Consumer credit represented 6.60 per cent of total private sector credit in 2025, down from 7.98 per cent in the previous year.
Banks adjust loan portfolios
Beyond household lending, the CBN said banks continued to reshape the maturity profile of their loan books.
Short-term credit remained dominant at 51.60 per cent of total lending, although its share declined from the previous year. Medium-term credit slipped slightly to 13.46 per cent, while long-term loans expanded to 34.94 per cent, reflecting a gradual shift towards longer-tenor financing.
On the liability side, deposits with maturities of one year or less accounted for 91 per cent of total deposits in 2025, reinforcing banks’ preference for maintaining relatively short-term funding structures.
The consumer credit slowdown comes despite continued growth in lending to businesses. Separate CBN data showed credit to the private sector climbed to about N83.3 trillion in June 2026, even as the Monetary Policy Committee retained the Monetary Policy Rate at 26.50 per cent in its effort to tame inflation.
