Personal Loans in Nigeria Rise to N1.96 Trillion as Consumer Credit Expands

Personal loans issued by Nigerian banks climbed to N1.96 trillion in January 2026, accounting for more than half of the country’s total consumer credit, according to the latest Economic Report released by the Central Bank of Nigeria.

The report revealed that total consumer credit outstanding increased slightly to N3.81 trillion in January from N3.78 trillion recorded in December 2025, representing a 0.79 percent rise. The growth was driven entirely by increased demand for personal loans, highlighting the growing reliance of households on bank credit amid persistent economic pressures.

According to the CBN, personal loans grew by 5.95 percent from N1.85 trillion in December to N1.96 trillion in January, making up 51.44 percent of total consumer credit in the country.

In contrast, retail loans declined during the same period. The report showed that retail lending dropped by 4.15 percent to N1.85 trillion from N1.93 trillion, accounting for the remaining 48.56 percent of consumer credit. The latest figures suggest that more Nigerians are turning to personal borrowing to cope with rising living costs, inflation, and increasing financial obligations.

Beyond consumer lending, the report also showed that total credit to the Nigerian economy recorded marginal growth in January 2026. Aggregate credit rose by 0.17 percent to N57.41 trillion from N57.32 trillion in December 2025.

The apex bank attributed the increase mainly to higher lending to the services and agriculture sectors, while credit to the industrial sector experienced a slight decline. According to the report, the services sector remained the largest beneficiary of bank lending, accounting for nearly 57 percent of total credit. Industry accounted for 36.55 percent, while agriculture received 6.47 percent.

Credit to agriculture increased from N3.71 trillion in December to N3.81 trillion in January, reflecting continued lending support for farming and agribusiness activities. Lending to the services sector also rose to N32.86 trillion during the review period.

Within the services sector, financial services, insurance, and capital market activities attracted the highest volume of loans at N9.16 trillion, while trade and general commerce received N5.54 trillion in credit.

Manufacturing remained the largest segment within industrial lending, receiving N6.37 trillion, while construction and power sectors secured N2.44 trillion and N1.59 trillion respectively.

The CBN report also noted that Nigeria’s broad money supply contracted by 1.50 percent in January due to tighter liquidity conditions and a decline in net foreign assets. Despite the contraction, the banking sector was described as stable, with prudential indicators remaining within regulatory thresholds.

Speaking after the 305th meeting of the Monetary Policy Committee, CBN Governor Olayemi Cardoso disclosed that lending to small and medium-sized enterprises had begun to improve.

According to him, new SME credit facilities rose from about N153 billion in March 2026 to nearly N199 billion in April, especially within the retail segment of the market.

Cardoso explained that the general business category accounted for over 94 percent of newly approved SME credit facilities, while general commerce represented a smaller share.

He also stressed that improving SME financing is not solely the responsibility of the Central Bank, noting that agencies such as the Ministry of Industry, Trade and Investment, the Bank of Industry, and fiscal authorities all have important roles to play in supporting businesses.

Meanwhile, the Monetary Policy Committee retained Nigeria’s benchmark interest rate at 26.5 percent, citing rising inflationary pressures, global economic uncertainty, and the need to maintain exchange rate stability.

The decision followed a fresh increase in Nigeria’s inflation rate. According to the National Bureau of Statistics, headline inflation rose to 15.69 percent in April 2026 from 15.38 percent in March, marking the second consecutive monthly increase.

Food inflation also climbed sharply to 16.06 percent, driven by higher transportation costs, logistics challenges, and seasonal supply pressures.

However, the President of the Association of Small Business Owners of Nigeria, Dr. Femi Egbesola, criticised the MPC’s decision to retain the interest rate, arguing that high borrowing costs continue to hurt businesses and households.

Egbesola said many small business owners had hoped for a reduction in rates to improve access to affordable financing and ease the burden of rising operational expenses.

He warned that keeping interest rates elevated could further worsen the challenges faced by businesses already struggling with inflation, high energy costs, and weak consumer spending across the economy.