Consumer credit in Nigeria rose by 1.3 percent to N2.35 trillion in the first quarter of 2023 from N2.32 trillion in the previous quarter, according to the Central Bank of Nigeria (CBN).
The banks’ latest quarterly economic report shows that credit also grew by 20.9 percent from N1.94 trillion recorded in Q4 2021.
“The increase in banking system liquidity and enhanced access to formal financial services, especially through fintech channels, that accompanied the naira redesign policy, boosted consumer credit,” it said.
It said this development coincided with the implementation of the naira redesign policy, which further facilitated consumer lending.
A breakdown of the figure revealed that consumer credit amounted to N2.35 trillion, accounting for 8.1 percent of total claims in the private sector.
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Within this category, personal loans constituted a substantial portion, totaling N1.75 trillion or 74.5 percent, while retail loans accounted for the remaining 25.5 percent at N598.3 billion.
According to the report, the growth in consumer credit during Q4 2021 was primarily driven by a slight decline in maximum lending rates.
At that time, consumer credit outstanding reached N2.07 trillion, marking a 6.7 percent increase from N1.94 trillion at the end of September 2021. Consumer credit represented 8.5 percent of total credit to the private sector.
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Banking system liquidity witnessed expansion due to the combined effects of fiscal and monetary operations in Q1.
Fiscal injections and the repayment of matured CBN bills rose to N2.45 trillion and N309.4 billion, respectively, up from N2.31 trillion and N231.12 billion in the previous quarter.
“The surge in consumer credit is indicative of the evolving financial landscape in Nigeria, with fintech playing a pivotal role in expanding access to credit and formal financial services,” it said.
