Nigerians Borrowing Surges Due to Economic Downturn

Nigerians Borrowing Surges Due to Economic Downturn
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Nigerians borrowed trillions amid economic hardship

The Central Bank of Nigeria has revealed just how much Nigerians borrowed in recent times, following its recent economic deterioration. Owing to the country’s consistently rising inflation rates, personal and retail loans have seen a significant increase in the space of a year. This demonstrates how the inflation rate has a profound impact on purchasing power.

  • Nigerians have significantly increased personal and retail loans due to rising inflation rates
  • Personal loans increased by 11.9% to N3.82 trillion in January 2024 compared to January 2023
  • Retail loans jumped by 3.6% to N794.79 billion

According to a review of the most recent monthly economic data available on the CBN’s official site, as seen in The Punch newspaper, personal loans increased by 11.9% to N3.82 trillion in January 2024, mostly due to higher inflation.

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The report revealed that on a year-over-year basis, the amount increased by N1.41 trillion from N2.41 trillion reported in January 2023.

The value of personal loans surged by 14.3% to N3.028 trillion from N2.648 trillion in December 2023, while retail loans jumped by 3.6% to N794.79 billion.

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Personal loans constituted 79.2% of consumer credit, while retail loans contributed 20.8%, indicating Nigerians’ struggle with persistent inflation and declining purchasing power.

“Total credit extended to key sectors of the economy by other depository corporations increased by 29.7 per cent to N57.76bn, compared with N44.536bn in the preceding month. The growth was driven by the sustained increase in credit to services (25.6 percent), industry (37.5 per cent), and agricultural sector (7.1 per cent),” the report stated

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A decomposition of sectoral credit indicated that the services sector remained dominant, accounting for 52.1 per cent. Industry constituted 44.7 percent, while agriculture accounted for the balance of 3.2 per cent,” the report added.

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