Nigeria’s consumer credit outstanding fell by N780 billion in February 2026, as elevated lending rates and tighter borrowing conditions weighed on household demand for loans despite easing monetary conditions and stronger banking system liquidity.
- +Nigeria’s consumer credit falls to N3.03 trillion as retail loans plunge 42%
Data contained in the Central Bank of Nigeria’s February 2026 Economic Report showed that total consumer credit declined by 20.48% to N3.03 trillion at the end of February from N3.81 trillion in January, reversing part of the gains recorded earlier in the year.
Data contained in the Central Bank of Nigeria’s February 2026 Economic Report showed that total consumer credit declined by 20.48% to N3.03 trillion at the end of February from N3.81 trillion in January, reversing part of the gains recorded earlier in the year.
The decline comes even as the apex bank began easing monetary conditions following a moderation in inflation, suggesting that households remained cautious about taking on new debt amid still-high borrowing costs.
A breakdown of the CBN data showed that personal loans continued to account for the bulk of consumer credit, representing 64.58% of the total outstanding portfolio.
The contraction was largely driven by a steep decline in retail lending, which fell by 41.85% during the month. Personal loans also edged lower by 0.40%.
The sharp fall in household credit contrasts with the broader credit market, where aggregate credit to the economy continued to expand.
The report showed that total credit increased by 0.82% to N57.88 trillion in February from N57.41 trillion in January, supported mainly by increased lending to the agriculture, industry and services sectors. Sectoral credit expansion reflected improved financing for productive activities even as household borrowing weakened.
Despite the CBN’s shift towards a more accommodative monetary stance, borrowing costs remained high across the banking sector.
The report also showed that banking system liquidity improved considerably during the month.
Average banking system liquidity rose by 23.69% to N3.08 trillion from N2.49 trillion in January, driven by fiscal injections as well as inflows from maturing Treasury bills and Federal Government bonds.
Interbank rates consequently eased, reflecting improved liquidity conditions across the financial system.
The Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over persistent structural weaknesses in Nigeria’s credit system, warning that despite a successful bank recapitalisation exercise, lending remains skewed and largely disconnected from productive sectors.
The think tank stressed that stronger bank balance sheets must now translate into meaningful support for the real economy.
Chairman of UBA Group, Tony Elumelu, recently advocated for more credit, commenting on why entrepreneurs often face stringent conditions when seeking loans from commercial banks, attributing the challenge largely to tightening regulatory requirements.
Elumelu noted that commercial banks have limits on the level of risk they can assume, particularly when it comes to financing small and medium-sized enterprises (SMEs).
