Nigerians Repay N1.33tn Personal Loans as Borrowing Declines — CBN

Outstanding personal loans in Nigeria declined significantly over the past year as households reduced borrowing and focused more on repaying existing debts, according to new data released by the Central Bank of Nigeria (CBN).

Figures contained in the apex bank’s Economic Report for November 2025 showed that personal loan balances dropped from N3.32 trillion in November 2024 to N1.99 trillion in November 2025. The reduction represents repayments totalling about N1.33 trillion within the 12-month period.

The fall in personal lending contributed to a broader contraction in consumer credit within the banking system.

Data from the report indicated that total consumer credit outstanding declined from N4.42 trillion in November 2024 to N3.19 trillion in November 2025.

The CBN attributed the decline largely to weaker activity in both personal and retail lending categories.

According to the report, consumer credit dropped by 13.32 per cent to N3.19 trillion from N3.68 trillion recorded in the previous month.

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Despite the decline, personal loans continued to account for the largest share of consumer credit in the financial system. The segment represented 62.38 per cent of the total at N1.99 trillion, while retail loans accounted for 37.62 per cent valued at N1.20 trillion.

Unlike personal loans, retail lending recorded modest growth over the review period. Retail loans increased from N1.11 trillion in November 2024 to N1.20 trillion in November 2025, representing an increase of roughly N90 billion year-on-year.

However, the growth in retail credit was insufficient to offset the steep drop recorded in personal loans, resulting in an overall decline in consumer borrowing.

The shift in borrowing behaviour occurred during a period of tight monetary conditions in Nigeria’s economy.

Throughout much of 2025, the CBN maintained high interest rates as part of efforts to curb inflation. The Monetary Policy Committee kept the Monetary Policy Rate at 27.5 per cent for most of the year before implementing a 50-basis-point reduction to 27 per cent in September.

The committee maintained the rate at the same level during its November meeting, reflecting continued caution about inflationary pressures.

High borrowing costs typically discourage new loans while encouraging households and small businesses to reduce existing debt obligations.

The data also suggests a gradual change in the structure of consumer borrowing, with individuals showing reduced appetite for unsecured personal loans while retail-related credit expanded slightly.