Nigeria’s consumer credit contracted for the first time in six years, dropping by 19.89 per cent to ₦3.78 trillion in 2025 from ₦4.72 trillion recorded in 2024, according to the Central Bank of Nigeria (CBN).
The decline, contained in the CBN’s 2025 Annual Report and Statement of Accounts, ended a growth trend that had been sustained since December 2019. The apex bank attributed the slowdown to the country’s high-interest-rate environment, which discouraged household borrowing and reshaped lending patterns across the banking sector.
Despite the overall decline, retail lending recorded strong growth during the year. Retail loans surged by 63.77 per cent to ₦1.94 trillion, making up 51.16 per cent of total consumer credit and overtaking personal loans as the largest segment of consumer lending for the first time in recent years.
Personal loans, however, declined sharply to ₦1.85 trillion, accounting for the remaining 48.84 per cent of consumer credit. The shift highlights changing borrowing behaviour as consumers adjusted to higher financing costs.
The report also showed that consumer credit accounted for a smaller share of total lending to the private sector. Outstanding consumer loans represented 6.60 per cent of total private sector credit extended by other depository corporations in 2025, down from 7.98 per cent a year earlier.
“Consumer credit outstanding moderated in response to the dynamic interest rate environment. Consumer credit outstanding fell 19.89 per cent to ₦3,783.40 billion in 2025 from ₦4,722.93 billion in the preceding period. The fall was the first since December 2019,” the CBN stated.
Beyond consumer lending, the report highlighted changes in banks’ loan portfolios. Short-term loans remained the largest category, accounting for 51.60 per cent of total credit, although their share declined by 7.71 percentage points compared with 2024. Meanwhile, long-term credit expanded significantly, increasing its share to 34.94 per cent, while medium-term lending slipped slightly to 13.46 per cent.
On the funding side, banks continued to rely heavily on short-term deposits. Deposits with maturities of one year or less accounted for 91 per cent of total deposit liabilities in 2025, up marginally from 90.09 per cent in the previous year. Medium-term deposits rose modestly, while long-term deposits declined sharply.
Although consumer lending weakened, overall credit to the private sector continued to grow. Earlier CBN data showed that private sector credit increased to ₦83.2 trillion in June 2026, up from ₦81.04 trillion in May and ₦76.13 trillion in June 2025, even as the Monetary Policy Committee maintained the benchmark Monetary Policy Rate (MPR) at 26.50 per cent in its effort to curb inflation.
