Retail loans decline despite rise in consumer credit to N3.81 trillion in January

Retail lending declined in January 2026 despite continued growth in consumer and personal loans, reflecting tighter banking system liquidity and cautious credit expansion by deposit money banks.

Data from the Central Bank of Nigeria’s January 2026 Economic Report showed that retail loans moderated during the review period, even as consumer credit outstanding rose to N3.81 trillion.

The development comes amid elevated interest rates and the apex bank’s tight monetary policy stance aimed at curbing inflation and stabilising the foreign exchange market.

What the report says 

Despite the slowdown in retail lending, personal loans remained a major driver of household borrowing during the period, supported by rising demand for salary-backed facilities, digital credit, and short-term consumer financing.

The continued increase in consumer credit balances suggests Nigerians relied more heavily on borrowing to manage rising living costs and weakening purchasing power.

Consumer credit outstanding climbed to N3.81 trillion in January 2026, showing a sustained appetite for household financing despite tighter lending conditions across the banking sector.

• The report read, “Consumer credit outstanding increased by 0.79% to N3.81 trillion, from N3.78 trillion in the preceding month. The increase in consumer credit was due solely to the rise in personal loans by 5.95% to N1.96 trillion from N1.85 trillion, which constituted 51.44% of total consumer credit. Retail loans fell by 4.15% to N1.85 trillion from N1.93 trillion and constituted 48.56% of total consumer credit.” 

The trend also highlights the growing role of retail banking products in Nigeria’s credit market, particularly as banks increasingly deploy digital channels and payroll lending products to expand their retail portfolios.

Consumer credit rises amid tighter liquidity 

The CBN report showed that monetary conditions tightened further during the review period, contributing to slower lending growth across segments of the economy.

Broad money supply declined by 1.50% in January 2026, driven largely by a contraction in net foreign assets. Currency outside depository corporations fell by 2.02%, while transferable deposits and other deposits also declined during the month.

According to the apex bank, tighter liquidity in the banking system contributed to higher interbank rates.

The liquidity squeeze likely pressured banks to become more selective in extending retail loans despite rising demand for consumer credit.

Total credit growth remains weak 

Meanwhile, total credit to the economy expanded marginally by 0.17% to N57.41 trillion in January 2026 from N57.32 trillion in December 2025.

The increase was driven mainly by higher lending to the services and agriculture sectors, which grew by 0.12% and 2.77%, respectively, during the month. Credit to the industrial sector, however, declined by 0.24%.

The services sector remained the largest recipient of bank credit, accounting for 56.98% of total loans in the economy, followed by industry with 36.55% and agriculture with 6.47%.

The CBN added that the banking sector remained stable and resilient during the review period, with prudential indicators staying within regulatory thresholds.

What you should know 

The Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over persistent structural weaknesses in Nigeria’s credit system, warning that despite a successful bank recapitalisation exercise, lending remains skewed and largely disconnected from productive sectors.

The think tank stressed that stronger bank balance sheets must now translate into meaningful support for the real economy.

Retail lending declined in January 2026 despite continued growth in consumer and personal loans, reflecting tighter banking system liquidity and cautious credit expansion by deposit money banks.

Data from the Central Bank of Nigeria’s January 2026 Economic Report showed that retail loans moderated during the review period, even as consumer credit outstanding rose to N3.81 trillion.

The development comes amid elevated interest rates and the apex bank’s tight monetary policy stance aimed at curbing inflation and stabilising the foreign exchange market.

What the report says 

Despite the slowdown in retail lending, personal loans remained a major driver of household borrowing during the period, supported by rising demand for salary-backed facilities, digital credit, and short-term consumer financing.

The continued increase in consumer credit balances suggests Nigerians relied more heavily on borrowing to manage rising living costs and weakening purchasing power.

Consumer credit outstanding climbed to N3.81 trillion in January 2026, showing a sustained appetite for household financing despite tighter lending conditions across the banking sector.

• The report read, “Consumer credit outstanding increased by 0.79% to N3.81 trillion, from N3.78 trillion in the preceding month. The increase in consumer credit was due solely to the rise in personal loans by 5.95% to N1.96 trillion from N1.85 trillion, which constituted 51.44% of total consumer credit. Retail loans fell by 4.15% to N1.85 trillion from N1.93 trillion and constituted 48.56% of total consumer credit.” 

The trend also highlights the growing role of retail banking products in Nigeria’s credit market, particularly as banks increasingly deploy digital channels and payroll lending products to expand their retail portfolios.

Consumer credit rises amid tighter liquidity 

The CBN report showed that monetary conditions tightened further during the review period, contributing to slower lending growth across segments of the economy.

Broad money supply declined by 1.50% in January 2026, driven largely by a contraction in net foreign assets. Currency outside depository corporations fell by 2.02%, while transferable deposits and other deposits also declined during the month.

According to the apex bank, tighter liquidity in the banking system contributed to higher interbank rates.

The liquidity squeeze likely pressured banks to become more selective in extending retail loans despite rising demand for consumer credit.

Total credit growth remains weak 

Meanwhile, total credit to the economy expanded marginally by 0.17% to N57.41 trillion in January 2026 from N57.32 trillion in December 2025.

The increase was driven mainly by higher lending to the services and agriculture sectors, which grew by 0.12% and 2.77%, respectively, during the month. Credit to the industrial sector, however, declined by 0.24%.

The services sector remained the largest recipient of bank credit, accounting for 56.98% of total loans in the economy, followed by industry with 36.55% and agriculture with 6.47%.

The CBN added that the banking sector remained stable and resilient during the review period, with prudential indicators staying within regulatory thresholds.

What you should know 

The Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over persistent structural weaknesses in Nigeria’s credit system, warning that despite a successful bank recapitalisation exercise, lending remains skewed and largely disconnected from productive sectors.

The think tank stressed that stronger bank balance sheets must now translate into meaningful support for the real economy.