Outstanding personal loans owed by Nigerians to financial institutions rose to a record N1.99 trillion at the end of June 2026, following an increase of N58.5 billion in the second quarter, as households continued to contend with rising living costs and high borrowing rates.
An analysis of the Central Bank of Nigeria’s Second Quarter 2026 Economic Report showed that personal loans increased by 3.03 percent from approximately N1.93 trillion recorded at the end of March.
The increase formed part of a broader rise in consumer credit, which grew by 3.26 percent to N3.17 trillion in June from N3.07 trillion in the preceding quarter.
The CBN attributed the growth to increases in both personal and retail loans, which rose by 3.03 percent and 4.10 percent, respectively.
Personal loans accounted for 62.87 percent of total consumer credit, while retail loans represented the remaining 37.13 percent, indicating that personal borrowing constituted the larger share of consumer debt.
Retail loans also increased by approximately N46.5 billion to N1.18 trillion at the end of June, compared with N1.13 trillion in March.
The growth in personal borrowing coincided with renewed inflationary pressures. According to the CBN report, headline inflation rose to 15.91 percent in June from 15.38 percent in March 2026.
The report linked the increase largely to higher energy and commodity prices associated with geopolitical tensions in the Middle East, which pushed up production and transportation costs.
These developments added pressure to household budgets, particularly as consumers struggled to maintain purchasing power amid rising prices of essential goods and services.
Borrowing costs also remained elevated during the period. The average prime lending rate declined slightly to 19.01 percent in the second quarter from 19.37 percent in the first quarter, while the maximum lending rate increased marginally to 34.37 percent from 34.34 percent.
Although these figures represent general banking-sector lending rates rather than the specific charges on individual personal loans, they reflect the high-cost borrowing environment facing consumers.
The trend also mirrors findings from the 2026 Access to Financial Services in Nigeria Survey, which indicated that an increasing proportion of Nigerians were taking formal loans to meet consumption and other immediate financial needs.
The survey, conducted by Enhancing Financial Innovation and Access, showed that 40.8 percent of formal borrowers used loans for consumption and coping needs in 2026, compared with 31.7 percent in 2023.
In contrast, the proportion of borrowers using credit for productive business activities declined from 40.2 percent to 34.3 percent over the same period.
Borrowing for household assets also dropped from 25.2 percent to 23.4 percent.
The survey further revealed that formal credit use increased from six percent of adults in 2023 to 10 percent in 2026, representing approximately 11.9 million Nigerians borrowing from regulated financial institutions.
When informal sources of credit were included, 36 percent of Nigerian adults had access to some form of borrowing.
Credit access also expanded among different population groups. Borrowing among informally employed Nigerians tripled from five percent to 15 percent, while the proportion among people aged 18 to 35 increased from four percent to 10 percent.
Business owners recorded an increase from four percent to 10 percent, while borrowing among farmers rose from two percent to six percent.
The findings highlight the growing role of credit in helping Nigerian households manage financial pressures, while raising concerns about the extent to which borrowing is being channelled towards immediate consumption rather than productive activities.