Nigerians’ outstanding personal loans rose by an estimated ₦58.5bn in the second quarter of 2026 to reach ₦1.99tn at the end of June. Households were dealing with persistent inflationary pressures and high borrowing costs during the period.
An analysis by The PUNCH of the Central Bank of Nigeria’s Second Quarter 2026 Economic Report showed that personal loans grew by 3.03 per cent from about ₦1.93tn recorded at the end of March.
Total consumer credit also increased, by 3.26 per cent to ₦3.17tn from ₦3.07tn in the previous quarter. This represents a rise of about ₦100bn within three months.
The CBN stated, “Consumer credit outstanding increased by 3.26 per cent to ₦3.17tn, from ₦3.07tn in the preceding quarter. The increase reflected growth in both retail and personal loans, which rose by 4.10 per cent and 3.03 per cent, respectively.”
The report showed that personal loans made up 62.87 per cent of total consumer credit, while retail loans accounted for the remaining 37.13 per cent.
This means nearly ₦63 out of every ₦100 owed by consumers to financial institutions was classified as personal borrowing, which shows its dominance in the consumer credit market.
Retail loans rose by about ₦46.5bn to ₦1.18tn at the end of June, from an estimated ₦1.13tn in March. This represents quarterly growth of 4.10 per cent.
Retail loans recorded the faster percentage increase, but personal loans contributed more to the outstanding stock of consumer credit.
The rise in personal borrowing came amid renewed inflationary pressures, which continued to weigh on household purchasing power.
The CBN reported that headline inflation rose to 15.91 per cent in June 2026 from 15.38 per cent in March, reflecting higher prices of essential goods and services.
The report largely attributed this to higher energy and commodity prices linked to geopolitical tensions in the Middle East, which raised production and transportation costs.
These conditions put additional pressure on household spending, especially for consumers whose incomes had not risen enough to offset higher prices.
However, the report did not establish whether the increase in personal loans was driven mainly by household financial difficulties, consumption needs or improved access to credit.
Consumer borrowing also grew despite elevated lending rates in the banking sector.
According to the CBN, the average prime lending rate fell marginally to 19.01 per cent in the second quarter from 19.37 per cent in the preceding quarter.
In contrast, the maximum lending rate rose slightly to 34.37 per cent from 34.34 per cent, showing that borrowing remained expensive for some categories of bank customers.
These rates reflect broader banking sector lending conditions rather than specific personal loan charges. They nonetheless give an indication of the financing environment facing borrowers.
A recent report, ‘Enhancing Financial Inclusion & Advancement’, noted that four in every 10 Nigerians borrowing from formal financial institutions now take loans mainly for consumption and coping needs. It said rising financial pressures were increasingly pushing credit away from productive activities.
The ‘2026 Access to Financial Services in Nigeria Survey’ revealed that 40.8 per cent of formal borrowers used loans for coping and consumption, up sharply from 31.7 per cent in 2023.
The 9.1 percentage-point increase made coping and consumption the largest purpose of formal credit. It overtook productive enterprise borrowing, which fell from 40.2 per cent to 34.3 per cent over the same period.
Borrowing for household assets also declined, from 25.2 per cent to 23.4 per cent.
The report warned, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”
Formal credit use rose from six per cent of adults in 2023 to 10 per cent in 2026, with about 11.9 million Nigerians borrowing from regulated providers. When informal sources were included, 36 per cent of adults had access to some form of credit.
Credit use among informally employed Nigerians tripled from five per cent to 15 per cent. Borrowing among people aged 18 to 35 rose from four per cent to 10 per cent.
Business owners recorded an increase from four per cent to 10 per cent, while borrowing among farmers rose from two per cent to six per cent.
