The Central Bank of Nigeria (CBN) has revealed that Nigerians borrowed a staggering N470 billion in personal loans from banks in the last quarter of 2024.
This disclosure was contained in the apex bank’s Fourth Quarter 2024 Economic Report, which highlighted a significant increase in consumer credit outstanding.
The report stated that total consumer credit surged by 11.06%, reaching N4.72 trillion by December 2024, compared to N4.25 trillion at the end of September.
A closer analysis of the data indicates that personal loans experienced a substantial 21.27% rise, climbing to N3.82 trillion from N3.15 trillion in the previous quarter. This increase accounted for the bulk of the consumer credit expansion, reflecting shifting borrowing trends among Nigerians.
Conversely, retail loans witnessed a sharp decline of 18.18%, dropping from N1.10 trillion to N0.90 trillion, suggesting a reduced appetite for retail credit.
The report further shows personal loans constitute 80.98% of total consumer credit, while retail loans account for the remaining 19.02%.
The CBN attributed the surge in personal loans to several factors, including mounting inflationary pressures, escalating living costs, and the increased accessibility of bank credit to individuals.
“Consumer credit outstanding rose by 11.06% to N4.72 trillion at the end of December 2024 from N4.25 trillion at the end of September 2024.
“Personal loans increased by 21.27% to N3.82 trillion compared with the level at the end of September 2024. Retail loans, however, declined by 18.18% to N0.90 trillion from N1.10 trillion at end-September 2024.
“A breakdown indicated that personal loans, with a share of 80.98%, remained dominant, while retail loans accounted for the balance,” the report stated.
The surge in borrowing comes despite the CBN’s tightening monetary policy aimed at curbing inflation. Throughout 2024, the CBN’s Monetary Policy Committee (MPC) aggressively raised the Monetary Policy Rate (MPR) by 875 basis points, bringing it to 27.50%.
However, inflation remained high, reaching 34.80% in December 2024, up from 34.60% in November. The rise was largely driven by increased demand for food and non-alcoholic beverages during the festive season.
While the tightening of monetary policy has made borrowing more expensive, the sustained demand for personal loans reflects the financial pressures faced by many Nigerians, who increasingly rely on credit to meet essential needs.
