Consumer Credit Falls By ₦780bn As High Interest Rates Weigh On Household Borrowing

June 30 () — Outstanding consumer credit in Nigeria declined by ₦780 billion to ₦3.03 trillion in February 2026, as elevated borrowing costs continued to dampen household demand for loans despite improving economic conditions.

According to the Central Bank of Nigeria’s February 2026 Economic Report, consumer credit dropped from ₦3.81 trillion in January, driven by declines in both personal and retail lending.

The contraction came even as credit to the broader economy continued to expand. Total credit rose by 0.82 percent to ₦57.88 trillion from ₦57.41 trillion in January, supported by increased lending to productive sectors of the economy.

The CBN said credit to agriculture grew by 2.7 percent, industry by 1.05 percent and services by 0.46 percent. The services sector remained the largest recipient of bank lending, accounting for 56.78 percent of total credit, followed by industry at 36.64 percent and agriculture at 6.58 percent.

The report noted that monetary conditions eased during the month as inflation moderated, while banking system liquidity improved significantly. Average liquidity rose by 23.69 percent to ₦3.08 trillion, driven by fiscal injections and maturing government securities.

Business activity also strengthened, with the composite Purchasing Managers’ Index increasing to 56.4 in February from 55.7 in January, reflecting expansion across the industry, services and agriculture sectors.

Despite these positive indicators, lending rates remained high, limiting consumer borrowing. The Monetary Policy Committee subsequently retained the benchmark interest rate at 26.5 percent, citing renewed inflationary pressures and external risks.

CBN Governor, Olayemi Cardoso, however, said lending to small and medium-sized enterprises had started to improve, with new SME credit rising to about ₦199 billion in April from ₦153 billion in March. He added that while the CBN would continue to improve the lending environment, expanding access to finance also requires coordinated support from fiscal authorities and development finance institutions.