Nigeria’s consumer credit declined for the first time in six years, falling by 19.89 per cent to N3.78tn in 2025 from N4.72tn a year earlier, as elevated interest rates dampened household borrowing, according to the Central Bank of Nigeria.

The decline, disclosed in the CBN’s 2025 Annual Report and Statement of Accounts, ended a growth streak that had persisted since December 2019.

The apex bank linked the contraction to the prevailing interest rate environment, which reshaped borrowing patterns across the banking industry.

A breakdown of the figures showed that the overall decline was largely driven by a reduction in personal loans, despite a strong expansion in retail lending during the year.

The shift also changed the structure of consumer lending, with retail credit overtaking personal loans to account for the largest share of outstanding consumer credit.

The report stated that retail loans climbed 63.77 per cent to N1.94tn in 2025, representing 51.16 per cent of total consumer credit.

Personal loans, on the other hand, fell to N1.85tn, accounting for the remaining 48.84 per cent of the portfolio.

According to the CBN, consumer lending also represented a smaller portion of banks’ overall credit exposure to the private sector.

Consumer credit accounted for 6.60 per cent of total private sector credit extended by other depository corporations in 2025, down from 7.98 per cent in the previous year.

“Consumer credit outstanding moderated in response to the dynamic interest rate environment. Consumer credit outstanding fell 19.89 per cent to N3,783.40bn in 2025 from N4,722.93bn in the preceding period. The fall was the first since December 2019,” the CBN said.

Beyond consumer lending, the report highlighted changes in the maturity profile of banks’ loan books.

Short-term credit remained the dominant asset class, accounting for 51.60 per cent of total credit, although its share declined by 7.71 percentage points compared with 2024.

Medium-term credit edged lower to 13.46 per cent, slipping by 0.11 percentage points, while long-term credit expanded its share significantly, rising by 7.82 percentage points to 34.94 per cent.

The apex bank attributed the continued dominance of short-term lending to banks’ strategy of aligning loan maturities with their short-term deposit base.

However, the increase in long-term credit reflected a gradual adjustment in banks’ lending profiles during the year.

On the liability side, deposits with maturities of one year or less remained overwhelmingly dominant.

Short-term deposits accounted for 91 per cent of total deposit liabilities in 2025, up slightly from 90.09 per cent in 2024.

Medium-term deposits increased to 5.15 per cent, while the share of long-term deposits dropped sharply to 3.85 per cent from 7.28 per cent.

Overall, the CBN’s report showed that while total consumer credit contracted in 2025, the composition of lending shifted in favour of retail borrowing, with long-term lending also gaining a larger share of banks’ asset portfolios.

Separately, private sector credit continued to expand despite tighter monetary conditions.

CBN data previously showed credit to the private sector increased to N83.2tn in June 2026 from N81.04tn in May, representing a nine per cent increase from N76.13tn recorded in June 2025.

The expansion came even as the Monetary Policy Committee retained the benchmark Monetary Policy Rate at 26.50 per cent, maintaining a tight monetary stance aimed at containing inflation.