Outstanding personal loans obtained by Nigerians climbed by an estimated N58.5bn in the second quarter of 2026, reaching N1.99tn by the end of June, amid sustained inflationary pressures and elevated borrowing costs.
An analysis by The PUNCH of the Central Bank of Nigeria’s Second Quarter 2026 Economic Report revealed that personal loans increased by 3.03 per cent from approximately N1.93tn recorded at the end of March.
The increase occurred as total consumer credit expanded by 3.26 per cent to N3.17tn from N3.07tn in the preceding quarter, representing an additional N100bn in borrowing within three months.
The CBN stated, “Consumer credit outstanding increased by 3.26 per cent to N3.17tn, from N3.07tn 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 represented 62.87 per cent of total consumer credit, while retail loans accounted for the remaining 37.13 per cent.
This indicates that approximately N63 out of every N100 owed by consumers to financial institutions came from personal borrowing, underscoring its substantial share of the consumer credit market.
Retail loans equally recorded an increase of approximately N46.5bn, rising to N1.18tn at the end of June from an estimated N1.13tn in March, translating to quarterly growth of 4.10 per cent.
Despite recording a higher percentage increase, retail loans contributed less to the total outstanding consumer credit compared with personal loans.
The expansion in personal borrowing came against the backdrop of renewed inflationary pressures, which continued to erode household purchasing power.
According to the CBN, headline inflation increased to 15.91 per cent in June 2026 from 15.38 per cent in March, following higher prices of essential goods and services.
The report largely linked the development to rising energy and commodity prices triggered by geopolitical tensions in the Middle East, which pushed up production and transportation expenses.
The prevailing economic conditions further strained household spending, particularly among consumers whose earnings had failed to rise adequately to cushion the impact of increasing prices.
However, the report did not determine whether the rise in personal loans was mainly attributable to financial hardship among households, consumption requirements or greater access to credit facilities.
The increase in consumer borrowing also took place despite high lending rates across the banking sector.
The CBN disclosed that the average prime lending rate fell slightly to 19.01 per cent in the second quarter from 19.37 per cent in the preceding quarter.
Conversely, the maximum lending rate edged up to 34.37 per cent from 34.34 per cent, indicating that credit remained costly for certain categories of bank customers.
While the rates represent general lending conditions within the banking sector rather than specific charges on personal loans, they offer an indication of the financing environment faced by borrowers.
A recent report by Enhancing Financial Inclusion & Advancement noted that four out of every 10 Nigerians borrowing from formal financial institutions now obtain loans mainly for consumption and coping purposes, as increasing financial pressures shift credit away from productive activities.
The 2026 Access to Financial Services in Nigeria Survey disclosed that 40.8 per cent of formal borrowers utilised loans for coping and consumption, representing a significant increase from 31.7 per cent in 2023.
The 9.1 percentage-point rise positioned coping and consumption as the leading purpose of formal borrowing, surpassing productive enterprise loans, which declined from 40.2 per cent to 34.3 per cent within the same period.
Borrowing for household assets also dropped from 25.2 per cent to 23.4 per cent.
The report cautioned, “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 utilisation increased from six per cent of adults in 2023 to 10 per cent in 2026, with approximately 11.9 million Nigerians accessing loans from regulated financial institutions.
When informal lending sources were included, 36 per cent of adults were found to have access to at least one form of credit.
Credit utilisation among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among individuals aged 18 to 35 increased from four per cent to 10 per cent.
Business owners also recorded an increase in credit usage from four per cent to 10 per cent, while borrowing among farmers rose from two per cent to six per cent.
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