By Sabiu Abdullahi
A recent report by the Central Bank of Nigeria (CBN) has revealed that Nigerians are increasingly relying on loans to survive the harsh economic conditions, with consumer credit jumping by 12% to approximately ₦3.9 billion in January 2024.
According to the CBN’s monthly economic report, the total consumer credit outstanding increased to ₦3,823 billion in January 2024, with personal loans accounting for 79% of consumer credit and retail loans accounting for 21%.
The report noted that personal loans increased by 14.3% to ₦3,028 billion, while retail loans rose by 4% to ₦795 billion. However, consumer credit as a share of total credit from Online Data Capture Systems (ODCs) declined to 7% from 8% in the preceding month.
The surge in demand for loans comes as the headline inflation rate hit 33.95% in May, forcing the CBN to hike the interest rate consecutively to 26.25%.
A study by SBM Intelligence found that 27% of Nigerians across different income categories now resort to loan apps to keep up with their living expenses in the wake of record inflation.
“The severe impact of the unyielding inflationary pressures on the daily lives of Nigerians, especially those already grappling with limited financial resources, is evident in the surge in demand for loan apps,” the report noted.
As the cost of living continues to escalate, Nigerians are finding it increasingly difficult to make ends meet, with many resorting to loans as a survival strategy.