Nigerians’ personal loans to commercial banks decreased significantly from ₦7.52 trillion in the first quarter of 2024 to ₦3.47 trillion in the second quarter, reflecting the impact of high interest rates.
This information comes from the Central Bank of Nigeria’s (CBN) quarterly economic report for Q2 2024.
According to the report, personal loan balances dropped by 53.9%, from ₦7.52 trillion in the first quarter to ₦3.47 trillion in the second quarter. This contrasts sharply with the ₦5.49 trillion increase seen in the first quarter of 2024.
The CBN report states: “Consumer credit outstanding declined by 42.60% to ₦4.73 trillion in Q2 2024, relative to the level in the preceding quarter. Personal loans fell to ₦3.47 trillion, from ₦7.52 trillion in Q1 2024, but remained dominant, accounting for 73.35% of the total consumer credit. Retail loans, however, grew to ₦1.26 trillion from ₦0.72 trillion in the preceding period.”
While the report did not specify the reasons for this decline, it suggests that many Nigerians are repaying their loans, likely influenced by the high interest rates resulting from the central bank’s hawkish monetary policy. This trend is also evident in the overall decrease in consumer credit outstanding, which fell by 42.6% to ₦4.73 trillion in Q2 2024.
Personal loans made up 73.35% of the total consumer credit, while retail loans rose from ₦0.72 trillion to ₦1.26 trillion, indicating a shift towards smaller-scale credit facilities. This suggests that while individuals are paying off their debts, small businesses in the retail sector are borrowing more to cope with the high cost of doing business.
Get instant and latest news updates via Our WhatsApp Community, X/Twitter or Google News online channel.
