Nigeria’s Consumer Credit Drops to N3.03 Trillion as Retail Loans Crash 42%

Nigeria’s consumer credit market suffered a major setback in February 2026, with total outstanding consumer loans dropping sharply to N3.03 trillion from N3.81 trillion recorded in January. According to the Central Bank of Nigeria (CBN), the 20.48 percent decline reflects growing caution among households as high borrowing costs continue to discourage new loan applications despite signs of easing monetary conditions.

The latest figures reveal that retail lending was the hardest hit segment, plunging by 41.85 percent within a single month. Personal loans, which remain the dominant component of consumer credit, also recorded a slight decline of 0.40 percent. The development marks a significant reversal from the growth recorded in 2025 when consumer credit exceeded N5 trillion at its peak in May, highlighting the pressure facing Nigerian households amid economic uncertainty.

CBN data showed that personal loans accounted for 64.58 percent of total consumer credit, equivalent to approximately N1.96 trillion, while retail loans made up the remaining 35.42 percent or about N1.07 trillion. The apex bank noted that the decline suggests repayments may be outpacing fresh loan disbursements, indicating that many consumers are prioritizing debt reduction over taking on new financial obligations.

Despite the decline in household borrowing, lending across the broader economy continued to expand. Total credit to the economy rose by 0.82 percent to N57.88 trillion in February, driven largely by increased financing for agriculture, industry, and service sectors. This trend points to a banking sector that is still supporting productive economic activities even as consumer demand for credit weakens.

Analysts say persistently high lending rates remain a major obstacle to consumer borrowing. The average maximum lending rate climbed to 35.17 percent in February from 32.68 percent in January, making loans increasingly expensive for individuals and families. While banking system liquidity improved significantly during the month, experts including the Centre for the Promotion of Private Enterprise (CPPE) have warned that stronger bank balance sheets must translate into easier access to credit for businesses and households. UBA Group Chairman Tony Elumelu also recently emphasized the need for increased lending, noting that strict regulatory requirements continue to limit banks’ ability to extend credit, particularly to small and medium-sized enterprises.

source: nairametrics