Consumer credit drops 20% to ₦3.78tn in 2025 as retail loans surge past personal loans for first time
Consumer credit outstanding fell by 19.89% to ₦3.78 trillion in 2025 from ₦4.72 trillion the previous year, marking the first decline since December 2019, according to the CBN's 2025 Annual Report. The apex bank attributes this drop to the dynamic interest rate environment, particularly high borrowing costs.
The decline was driven by a sharp fall in personal loans, which dropped to ₦1.85 trillion, while retail lending surged 63.77% to ₦1.94 trillion. For the first time, retail loans now account for 51.16% of total consumer credit (up from previous years), with personal loans making up the remaining 48.84%. This composition shift also reduced consumer credit's share of total private sector credit to 6.60% from 7.98% in 2024.
The CBN noted short-term credit still dominates bank assets but long-term credit gained share during 2025, reflecting banks' preference for matching short-term lending with short-term deposits. With the CBN maintaining the Monetary Policy Rate at 26.50%, high interest rates continue to shape lending patterns. If you're seeking credit, retail-backed products like mortgages or auto loans may be more accessible now than unsecured personal loans, though overall borrowing costs remain elevated.