Nigerians borrowed approximately N4.82 trillion from banks between January and March 2024, driven by the rising cost of living.
In the Central Bank of Nigeria’s First Quarter 2024 Economic Report, consumer credit outstanding surged by 268.9%, reaching N8.24 trillion at the end of March, up from N3.42 trillion in December 2023
The sharp increase reflects the severe financial strain on households amid escalating inflation.
The report shows that the surge in consumer credit was primarily driven by a significant rise in both personal and retail loans.
The majority of consumer credit, however, is made up of personal loans, which increased by 270.4% to N7.52 trillion by the end of March 2024.
Similarly, retail loans saw a significant increase of 253.4%, reaching N721.13 billion.
This growth highlights a significant reliance on credit to manage personal finances, with personal loans comprising a dominant 91.2% of total consumer credit.
The report read: “Consumer credit outstanding grew by 268.9 per cent to N8,240.36 billion at end-March 2024, relative to the level at end-December 2023. The substantial growth in consumer credit was attributable to inflation expectations.
“A disaggregation of consumer credit showed that personal loans increased by 270.4 per cent to N7,519.2 billion, while retail loans increased by 253.4 per cent to N721.13 billion. Personal loans remained the principal component of consumer credit, with a 91.2 per cent share, while retail loans accounted for the balance.
“As a proportion of total sectoral credit, consumer credit increased to 15.5 per cent, from 7.7 per cent in end-December 2023.”
The surging inflation has left many Nigerians struggling under the burden of soaring costs for essentials like food, fuel, and rent.
In the first quarter of 2024, Nigeria’s headline inflation rate increased from 28.92% in December 2023 to 33.2% in March 2024, marking a 14.80% rise.
