More Loans Available for Unsecured Borrowers in Nigeria in 2025

The Central Bank of Nigeria‘s Credit Conditions Survey Report (Q1 2025) revealed that credit availability increased for unsecured borrowers (19.4 points) and corporate lending (18.7 points) in the quarter under review. Lenders, however, reported a decline in secured lending (-10.1 points) to households.

Demand for credit increased for secured (9.3 points) and corporate lending (18.7 points), while it declined for unsecured lending (-1.8 points). The increase in credit availability for unsecured lending was due to market share objectives. Changing economic outlook was the primary driver of corporate and secured credit availability. Lenders also reported reduced default rates for secured (3.9 points) and unsecured lending (5.0 points).

For Corporate lending, small (0.5 points) and medium (0.3 points) businesses reported lower default rates, while Large Private Non-Financial Corporations (-0.6 points) and other financial corporations (-0.6 points) observed higher default rates. All lending categories had widened lending rates relative to the Monetary Policy Rate (MPR) except for corporate lending to other financial corporations.

A critical finding emerging from the report is the rise in household demand for credit, accompanied by a fall in credit availability, which might weaken households’ financial resilience. To address this gap, policymakers should prioritise low-cost lending facilities and efficient loan distribution channels to support household liquidity. SOURCE: CSEA Africa