Banks’ Credit To Households Drops 10% As Large Companies Default Rate Rises

The Central Bank of Nigeria has said that credit to household fell by -10 per cent in the first three months of 2025.

This is according to the Credit Condition Survey Report for Q1, 2025 seen by THE WHISTLER.

During the period, banks reported increased credit availability for unsecured 19.4 per cent and corporate lending rose by 18.7 per cent.

But availability of credit for secured lending to households was reported to decrease by -10.1 per cent.

Overdraft and personal loans to households increased while credit cards lending to Households declined.

The report explained, “In Q1 2025, the increase in credit availability was attributed to increasing market share objectives for unsecured lending, while changing economic outlook was the main factor affecting corporate credit availability.

“The decrease in secured credit availability was primarily due to changing economic outlook.”

According to CBN financial institutions tightened credit scoring criteria tightened for Secured and Unsecured lending relative to the previous last quarter of 2024.

Also proportion of loan approval increased for secured loans to 12 per cent and 17.9 per cent for corporate lending types in Q1 2025.

But the approval rate for unsecured lending decreased to -2.1 per cent.

During the period, banks reported lower default rates for secured and unsecured lending.

But large Private Non-Financial Corporations (PNFCs) and Other Financial Corporations (OFCs) witnessed higher default rates.

Small businesses had lower default rate of 0.5 per cent while Medium PNFCs had default rate of 3 per cent.

The default rate of large PNFCs was higher at -0.6 per cent while OFCs had same rate of -0.6 per cent.

Banks’ Credit To Households Drops 10% As Large Companies Default Rate Rises is first published on The Whistler Newspaper