The rising cost of living has pushed Nigerians to borrow about 4.82 trillion naira from banks between January and March this year.
Consumer credit outstanding in Nigeria surged by 268.9% to 8.24 trillion naira by the end of March 2024, from 3.42 trillion naira in December 2023, reflecting the severe financial strain on Nigerians due to escalating inflation.
This is according to the First Quarter 2024 Economic Report published by the Central Bank of Nigeria (CBN).
The report shows that the surge in consumer credit was primarily driven by a significant rise in both personal and retail loans.
However, personal loans constitute the largest portion of consumer credit, rising by 270.4% to 7.52 trillion naira by the end of March 2024.
Similarly, retail loans saw a significant increase of 253.4%, reaching 721.13 billion naira.
This growth indicates a heightened reliance on credit to manage personal finances, with personal loans accounting for a dominant 91.2% share of total consumer credit.
A disection of the data from the CBN shows that the share of personal loans continued to rise, reaching 77.53% by December 2023 and 91.25% by March 2024.
Conversely, the proportion of retail loans has seen a significant decline, dropping from 25.46% in March 2023 to just 8.75% by March 2024.
This shift shows the growing dependency on personal loans as the primary source of consumer credit, likely reflecting the urgent financial needs of individuals in an increasingly challenging economic environment.
The decline in the share of retail loans suggests that consumers may be focusing more on securing funds for immediate personal needs rather than retail or commercial purposes.
The surging inflation has left many Nigerians groaning under the weight of the skyrocketing cost of everything from food to fuel and rent.