Nigeria’s banking sector witnessed a significant shift in 2025 as outstanding consumer credit fell for the first time in six years, while banks intensified fraud detection efforts, leading to a sharp increase in the number of Bank Verification Numbers (BVNs) placed on the industry’s fraud watchlist. According to the Central Bank of Nigeria (CBN), consumer credit dropped by 19.89 percent to N3.78 trillion, reflecting the impact of persistently high interest rates on household borrowing. At the same time, financial institutions flagged 13,117 BVNs for fraud, underscoring a stronger industry-wide commitment to combating financial crime.
The CBN’s 2025 Annual Report and Statement of Accounts revealed that the decline in consumer lending was driven mainly by a reduction in personal loans, which fell to N1.85 trillion. However, retail lending bucked the trend, surging by 63.77 percent to N1.94 trillion and becoming the largest segment of consumer credit for the first time in years. Retail loans accounted for 51.16 percent of total consumer credit, while personal loans represented 48.84 percent, highlighting a shift in borrowing patterns among Nigerians.
The report also showed that consumer credit’s contribution to total private sector lending weakened during the year, falling from 7.98 percent in 2024 to 6.6 percent in 2025. Banks continued to favor short-term lending, with such loans making up 51.6 percent of their credit portfolios despite a slight decline. Meanwhile, long-term lending gained momentum, increasing its share to 34.94 percent, reflecting gradual adjustments in banks’ lending strategies. The apex bank noted that the dominance of short-term loans aligns with financial institutions’ preference for matching short-term loans with short-term customer deposits.
Beyond lending, the CBN reported major improvements in fraud surveillance across the banking industry. An additional 3,641 BVNs were added to the fraud watchlist during the year, bringing the total number of flagged BVNs to 13,117, up from 9,476 in 2024. The regulator attributed the increase to stronger compliance measures, enhanced fraud monitoring systems, and improved case resolution. The number of deceased persons’ BVNs on the watchlist also climbed to 28,754, reflecting ongoing efforts to strengthen customer record management and prevent identity-related financial fraud.
Nigeria’s BVN ecosystem also continued to expand, reinforcing the country’s financial inclusion drive. Total BVN registrations rose to 67.82 million, adding 3.42 million new enrollments within the year. Bank accounts linked to BVNs increased significantly to 368.92 million, while active bank accounts reached 339.26 million. According to the CBN, the steady growth in registrations, linked accounts, and active accounts demonstrates stronger compliance, improved customer verification processes, and growing confidence in Nigeria’s banking system despite the challenging lending environment.
source: The guardian
