Nigeria’s consumer credit outstanding surged by 26.29% in November 2024, reaching N4.42 trillion, up from N3.5 trillion in October. This significant rise, as reported by the Central Bank of Nigeria (CBN) in its Monthly Economic Report, is largely attributed to inflation expectations, prompting more Nigerians to rely on credit to manage the increasing cost of living.
Personal loans saw the highest increase, growing by 37.76% to N3.32 trillion from N2.41 trillion in the previous month, making up 74.95% of total consumer credit. Retail loans, which are used for purchasing goods and services, experienced a more modest growth of 1.83%, rising to N1.11 trillion from N1.09 trillion.
Economic analysts suggest that the sharp rise in personal loans reflects the impact of inflation on household purchasing power, as many Nigerians turn to credit to cover essential expenses such as rent, food, healthcare, and education. The slower growth in retail loans indicates that high prices may be discouraging discretionary spending.
The increase in consumer credit coincides with the CBN’s efforts to improve financial inclusion and credit accessibility. However, concerns remain about the sustainability of rising debt levels, particularly as interest rates remain high. Throughout 2024, the CBN, under Governor Olayemi Cardoso, implemented a series of monetary policy rate hikes, raising it from 18.75% at the start of the year to 27.50% by November in a bid to curb inflation.
While these measures aim to stabilize the economy by controlling liquidity, they also put pressure on borrowers. Economic experts emphasize the need for policies that balance credit expansion with financial stability, ensuring that increased borrowing does not lead to higher default rates.
