• 45.8% of borrowers face repayment stress, 83.8% report financial stress
Nigerians are increasingly turning to loans to survive mounting financial pressure, with personal borrowing soaring to an estimated N2.06tn in May 2026, as households struggle with rising living costs, weak purchasing power and subdued consumer spending.
The latest figures from the Central Bank of Nigeria showed that personal loans accounted for 64.78 per cent of the N3.18tn consumer credit outstanding in May, meaning nearly two out of every three naira borrowed by consumers was in the form of personal credit.
The development came as economic activity remained weak and inflationary pressures continued to squeeze households and businesses.
The CBN’s May 2026 Economic Report showed that total consumer credit increased by N50bn in one month, rising from N3.13tn in April to N3.18tn in May.
The 1.60 per cent increase was driven by growth in both personal and retail loans, with personal borrowing rising by 1.98 per cent, compared with a 0.90 per cent increase in retail loans.
The apex bank stated, “Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”
Based on the CBN’s figures, personal loans stood at approximately N2.06tn, while retail loans accounted for about N1.12tn.
The latest increase means personal borrowing rose by roughly N40bn in just one month, highlighting the growing dependence on credit as households attempt to meet financial obligations.
Borrowing rises as spending weakens
The surge in consumer borrowing is coming at a time when Nigerians are reportedly spending less, pointing to growing financial pressure on households.
The CBN said its composite Purchasing Managers’ Index stood at 49.60 points in May, up marginally from 49.40 points in April but remaining below the 50-point mark that separates expansion from contraction.
According to the apex bank, subdued demand, declining new orders and elevated production costs contributed to the contraction.
It also identified weak consumer spending and rising energy-related costs as major pressures on the industry and services sectors.
Inflation added to the pressure.
Headline inflation rose from 15.69 per cent in April to 15.93 per cent in May, with the CBN blaming persistent cost pressures and higher energy prices.
Although month-on-month inflation slowed from 2.13 per cent to 1.75 per cent, household finances remained under significant strain.
Nigerians increasingly borrowing to survive
The growing reliance on personal loans mirrors a broader shift in the purpose of borrowing among Nigerians.
The 2026 Access to Financial Services in Nigeria Survey found that 40.8 per cent of Nigerians borrowing from formal financial institutions used the loans for coping and consumption, compared with 31.7 per cent in 2023.
That represented a sharp 9.1 percentage-point increase, making coping and consumption the largest purpose for formal borrowing.
At the same time, borrowing for productive activities declined.
Loans used for productive purposes fell from 40.2 per cent in 2023 to 34.3 per cent in 2026, while borrowing for household assets dropped from 25.2 per cent to 23.4 per cent.
The report warned against a situation where Nigerians increasingly borrow simply to survive rather than to build income-generating capacity.
It stated, “Coping/consumption purposes rose from 31.7 per cent to 40.8 per cent; productive purpose fell from 40.2 per cent to 34.3 per cent. We need to ensure that credit builds productive capacity and does not produce distress.”
11.9 million Nigerians now borrow formally
Formal credit use nevertheless expanded significantly during the period.
The survey showed that the proportion of Nigerian adults using formal credit increased from six per cent in 2023 to 10 per cent in 2026, representing about 11.9 million Nigerians borrowing from regulated financial institutions.
When informal sources were included, 36 per cent of Nigerian adults had access to some form of credit.
Credit use among informally employed Nigerians tripled from five per cent to 15 per cent, while borrowing among Nigerians aged 18 to 35 increased from four per cent to 10 per cent.
Business owners also recorded an increase from four per cent to 10 per cent, while farmers’ borrowing rose from two per cent to six per cent.
But repayment crisis looms
While more Nigerians are gaining access to credit, the figures also reveal the darker side of the borrowing boom.
The survey found that 45.8 per cent of formal-credit users reported some or serious repayment stress, while a staggering 83.8 per cent experienced ongoing financial stress.
The figures raise concerns that growing access to consumer credit could deepen household financial vulnerability if borrowers continue using loans primarily to finance everyday consumption rather than productive activities.
With personal borrowing already accounting for almost two-thirds of outstanding consumer credit, the rising figures suggest that for millions of Nigerians, borrowing is increasingly becoming less about investment and more about keeping up with the rising cost of survival.
