Business a.m.
Recent data from the Central Bank of Nigeria (CBN) has revealed that everyday Nigerians are turning to credit facilities from financial institutions to finance their day-to-day expenses, a move that has become increasingly common in the face of a cost of living crisis.
An analysis of the CBN’s most recent monthly economic report, highlighted a 14.3 percent spike in personal loans from N2.648 trillion in December 2023 to N3.028 trillion. This substantial increase in personal loans, now accounting for 79.2 percent of consumer credit, stands in contrast to retail loans, which comprise 20.8 percent of consumer credit and increased by 3.6 percent to N794.79 billion in January 2024.
The report further disclosed that total consumer credit experienced an 11.9 percent surge to N3.82 trillion in January 2024, attributed to a substantial uptick in personal loans. When compared to the previous year, the figure showed a N1.41 trillion increase from the N2.41 trillion recorded in January 2023.
The report stated: “Total consumer credit outstanding increased by 11.9 percent to N3.82 trillion in January 2024, driven mainly by the rise in personal loans amid heightened inflation. A breakdown of consumer credit revealed that personal loans increased by 14.3 percent to N3.028 trillion from N2.648 trillion in December 2023, while retail loans rose by 3.6 percent to N794.79 billion. Personal loans accounted for 79.2 percent of consumer credit, while retail loans accounted for 20.8 percent.
However, consumer credit, as a share of total credit from ODCs, declined to 6.6 percent from 7.7 percent in the previous month.”The apex bank further stated that total credit extended to key sectors of the economy increased by N13.22 billion or 29.7 percent to N57.76 billion, compared with N44.54 billion in the preceding month.
“Total credit extended to key sectors of the economy by other depository corporations increased by 29.7 percent to N57.76 billion, compared with N44.536 billion in the preceding month.
The report also revealed that sustained increases in credit extended to services (25.6%), industry (37.5%), and agriculture (7.1% ) were the chief drivers of consumer credit in the country. A dissection of sectoral credit distribution revealed that the services sector remained firmly in the lead, accounting for 52.1 percent share, followed closely by industry at 44.7 percent, with agriculture occupying the remaining 3.2 percent.
