Improved economic activities have driven lenders to increase credit supply, as credit availability expanded across secured, unsecured and corporate lending segments in the third quarter of 2025, reflecting a broad improvement in overall supply conditions.
This was disclosed in the Credit Conditions Survey published on the Central Bank of Nigeria’s website on Wednesday. The survey, conducted in September 2025, captures lenders’ views on secured and unsecured lending to households, private non-financial corporations, small businesses and other financial corporations, and represents the assessments of the lenders rather than the official position of the CBN.
According to the report, lenders attributed the rise in credit availability to a more favourable lending environment compared to the previous quarter. The findings showed upward movement in the availability of secured credit, unsecured credit and corporate credit, signalling a stronger willingness among institutions to extend credit during the period.
The survey further highlighted the factors influencing these changes. For secured and corporate lending, lenders said the improvement was largely driven by shifting economic outlooks, suggesting that more positive macroeconomic expectations boosted confidence to lend.
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In the unsecured segment, however, changes in lenders’ risk appetite played a more significant role, indicating that internal risk considerations shaped the level of credit available to households and small borrowers.
Demand for credit also increased across secured, unsecured and corporate categories in Q3 2025. The rise in demand was widespread, although certain exceptions emerged. In the secured segment, households’ demand for mortgage and re-mortgage products declined even as demand for credit for house purchase rose. In the unsecured category, households’ demand for overdrafts, personal loans and consumer loans increased, even though demand for credit card lending fell, suggesting that households were more inclined towards liquidity-focused borrowing rather than card-based spending.
Corporate credit demand strengthened across all business categories. Small businesses, medium private non-financial corporations and large firms all increased their borrowing needs. Other financial corporations also expanded their demand for credit, reflecting stronger financing requirements in the wider corporate landscape. The survey noted that while lending to small businesses within the household segment increased, mortgage and re-mortgage demand from households remained subdued, underlining the softer interest in this segment of secured lending.
Lenders reported higher credit availability levels across all segments, with secured lending availability at 21.2, unsecured at 7.1 and corporate lending at 12.0. Demand indicators also showed stronger appetite for borrowing, with 13.7 for secured credit, 1.0 for unsecured credit and 25.0 for corporate lending during the quarter.
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In terms of pricing, spreads on secured and unsecured lending rates relative to the Monetary Policy Rate (MPR) widened, while spreads on corporate lending showed mixed movements, with rates narrowing for medium PNFCs and other financial corporations but widening for small businesses and large PNFCs.
Default rates varied across lending segments. Secured lending recorded a lower default rate of 5.1, while unsecured lending posted a higher rate of 8.6. Corporate lending showed elevated defaults across business types, including 7.8 for small businesses, 7.8 for medium PNFCs, 5.5 for large PNFCs and 5.5 for other financial corporations. Despite the increase in credit supply, measured at 1.0 for small businesses, 2.6 for medium PNFCs, 0.4 for large PNFCs and 14.4 for OFCs, lenders observed that default rates remained generally higher for unsecured and corporate lending in Q3 2025.
Respondents identified inventory finance, reported at 24.3, as the primary driver of increased demand for corporate lending. Other contributors included balance sheet restructuring, capital investments and commercial real estate financing needs, indicating that businesses sought credit to support operations, strengthen financial positions and pursue growth-related activities.