According to the Central Bank of Nigeria, Nigeria’s consumer credit fell for the first time in six years, falling by 19.89 percent to N3.78 trillion in 2025 from N4.72 trillion a year earlier as high interest rates discouraged family borrowing.
The CBN’s 2025 Annual Report and Statement of Accounts revealed the dip, which put a halt to a growth trend that had continued since December 2019. The reduction was attributed by the top bank to the current interest rate environment, which altered borrowing patterns in the banking sector.
Despite a significant increase in retail lending during the year, a breakdown of the data revealed that the overall decline was mostly caused by a decrease in personal loans. The structure of consumer lending was also altered by the reform, with retail credit now making up the majority of outstanding consumer credit, surpassing personal loans.
According to the research, retail loans increased by 63.77 percent to N1.94 trillion in 2025, accounting for 51.16 percent of all consumer credit. Conversely, personal loans dropped to N1.85 trillion, making up the remaining 48.84 percent of the portfolio.
Additionally, consumer lending accounted for a lesser share of banks’ total credit exposure to the private sector, according to the CBN. In 2025, consumer credit made up 6.60 percent of all private sector credit provided by other depository corporations, a decrease from 7.98 percent the year before.
In reaction to the fluctuating interest rate environment, consumer credit outstanding decreased. Outstanding consumer credit decreased by 19.89 percent to N3,783.40 billion in 2025 from N4,722.93 billion in the previous year. The CBN said that it was the first fall since December 2019.
The research emphasized shifts in the maturity profile of banks’ loan books in addition to consumer lending. Despite a 7.71 percentage point decrease from 2024, short-term credit continued to be the largest asset type, making up 51.60 percent of all credit.
Long-term credit considerably increased its share, rising by 7.82 percentage points to 34.94 percent, while medium-term credit somewhat decreased to 13.46 percent, falling by 0.11 percentage points.
The apex bank blamed banks’ practice of matching loan maturities to their short-term deposit base for the persistence of short-term lending’s dominance. But throughout the course of the year, banks’ lending characteristics gradually changed, as evidenced by the rise in long-term credit.
Deposits with maturities of one year or less continued to dominate the liability side. In 2025, short-term deposits made up 91% of all deposit liabilities, a modest increase from 90.09% in 2024. Long-term deposits fell precipitously to 3.85 percent from 7.28 percent, while medium-term deposits rose to 5.15 percent.
Overall, the CBN’s research revealed that although overall consumer credit decreased in 2025, the lending mix changed to favor retail borrowing, and long-term lending also increased its share of banks’ asset portfolios.
Separately, despite tighter monetary conditions, private sector credit kept growing. According to earlier CBN data, lending to the private sector rose by 9% from N76.13 trillion in June 2025 to N83.2 trillion in June 2026 from N81.04 trillion in May.
