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Rising interest rates trigger first consumer credit decline since 2019 By Segun Odunewu, Lagos Nigeria's consumer credit market recorded its first contraction in more than five years as outstanding consumer loans fell by 19.89 percent to N3.78 trillion in 2025 from N4.72 trillion in 2024, according to the Central Bank of Nigeria (CBN). The decline, contained in the apex bank's 2025 Annual Report and Statement of Accounts, marks the first drop in consumer credit since December 2019 and reflects the impact of the country's prolonged high-interest-rate environment on household borrowing. The CBN attributed the decline to rising borrowing costs and changes in banks' lending patterns, which discouraged personal borrowing while encouraging a shift toward retail lending. According to the report, personal loans fell sharply to N1.85 trillion, driving the overall contraction in consumer credit. However, retail loans bucked the trend, surging by 63.77 percent to N1.94 trillion, making up 51.16 percent of total consumer credit for the first time in several years, while personal loans accounted for 48.84 percent. The apex bank also disclosed that consumer credit's share of total credit extended to the private sector by other depository corporations declined to 6.60 percent in 2025 from 7.98 percent recorded in the previous year. "Consumer credit outstanding moderated in response to the dynamic interest rate environment. Consumer credit outstanding fell by 19.89 per cent to N3,783.40 billion in 2025 from N4,722.93 billion in the preceding period. The fall was the first since December 2019," the CBN stated. The report further showed that short-term credit remained the largest component of banks' asset portfolios, accounting for 51.60 percent, although its share declined by 7.71 percentage points during the year. Meanwhile, medium-term deposits increased to 5.15 percent, while long-term deposits declined sharply to 3.85 percent from 7.28 percent. Latest CBN data show that credit to the private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, representing a 9 percent year-on-year increase from N76.13 trillion recorded in June 2025. The increase comes despite the Monetary Policy Committee's decision to retain the benchmark Monetary Policy Rate (MPR) at 26.5 percent, one of the highest levels in recent years. Financial analysts say the decline in consumer credit reflects the impact of tight monetary policy on household finances. Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said elevated interest rates have significantly reduced consumers' appetite for borrowing. According to him, the high cost of credit has made personal loans increasingly unaffordable, forcing households to postpone discretionary spending and rely more on essential retail financing. He noted that while the CBN's tight monetary stance is aimed at curbing inflation and stabilising the naira, it has also constrained consumer demand and weakened credit growth in the retail economy. Similarly, Managing Director of Optimus by Afrinvest, Ayodeji Ebo, said banks have become more cautious in extending unsecured personal loans amid higher default risks and elevated funding costs. He explained that financial institutions are increasingly prioritising lending segments with stronger repayment structures and lower credit risk, which partly explains the rise in retail loans relative to personal loans. Economic analysts also believe the gradual increase in long-term credit suggests banks are selectively financing productive sectors capable of generating sustainable returns despite prevailing macroeconomic headwinds. 777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777 Capital imports, non-oil exports lift Nigeria's forex inflows to $109.9bn--CBN By Segun Odunewu, Lagos Nigeria recorded a significant increase in foreign exchange (FX) inflows in 2025, with total receipts rising to $109.86 billion, representing a 13.81 percent increase from $96.53 billion recorded in 2024, according to the Central Bank of Nigeria (CBN). The figures, contained in the apex bank's 2025 Annual Report and Statement of Accounts, showed that stronger autonomous foreign exchange inflows—particularly from non-oil exports and capital importation—were the major drivers of the improvement. The CBN disclosed that total forex outflows also increased during the period, rising by 27.83 percent to $49.05 billion from $38.37 billion in 2024. Despite the increase in outflows, Nigeria maintained a positive external position, posting a net forex inflow of $60.81 billion, slightly higher than the $58.16 billion recorded in the previous year. According to the report, autonomous sources accounted for 64.21 percent of total forex inflows, underscoring the growing role of market-driven foreign exchange sources in supporting liquidity. Autonomous forex inflows climbed by 25.12 percent to $70.54 billion from $56.38 billion in 2024, while inflows through the CBN declined marginally. "Forex inflow through the Bank decreased by 2.08 per cent to US$39.32 billion and accounted for 35.8 per cent of total inflow," the apex bank stated. The CBN attributed the decline in official inflows primarily to lower receipts from government debt and foreign exchange swap transactions. It noted that the increase in autonomous inflows was largely driven by improved non-oil export earnings, over-the-counter foreign exchange purchases and stronger capital importation. The economy recorded a net inflow of $54.28 billion through autonomous channels, compared with $50.24 billion in 2024, while the CBN generated a net inflow of $6.52 billion. Outflows through the CBN increased marginally by 1.74 percent to $32.79 billion, while autonomous outflows surged by 164.84 percent to $16.26 billion. Total forex utilisation rose by 59.36 percent to $42.83 billion, compared with $26.88 billion recorded in 2024, largely driven by increased invisible imports. Visible imports accounted for $18.76 billion, representing 43.8 percent of total forex utilisation. The industrial sector accounted for the largest share of visible import-related foreign exchange demand at 42.11 percent, followed by the oil sector with 25.91 percent, manufactured products at 15.64 percent, and food imports at 10.51 percent. Economic analysts say the latest figures indicate that Nigeria is gradually reducing its dependence on official foreign exchange sources, although sustaining the momentum will require continued structural reforms. Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the growing contribution of autonomous inflows reflects renewed investor confidence and stronger non-oil foreign exchange earnings. According to him, increased capital importation and export diversification are encouraging developments that could help improve forex market liquidity and reduce pressure on the naira over time. He, however, cautioned that maintaining the trend would depend on policy consistency, macroeconomic stability and continued improvements in the investment climate. Similarly, Managing Director of Optimus by Afrinvest, Ayodeji Ebo, said the rise in autonomous inflows demonstrates that recent foreign exchange market reforms are beginning to attract private capital back into the economy. He noted that while higher inflows are positive for external reserves and exchange rate stability, the sharp increase in forex utilisation also points to sustained demand for foreign exchange by businesses and manufacturers. 77777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777777 CBN fines Banks N430m over customer complaint delays, regulatory breaches By Segun Odunewu, Lagos The Central Bank of Nigeria (CBN) imposed N430 million in penalties on financial institutions in 2025 for delays in resolving customer complaints and failure to comply with regulatory directives, signaling a tougher enforcement approach to consumer protection in the banking sector. The sanctions were disclosed in the apex bank's 2025 Annual Report and Statement of Accounts, which revealed that 21 penalties were issued against financial institutions for infractions related to complaints management. According to the report, the affected institutions were sanctioned for "delays in resolving customer complaints to failure to comply with the Bank's directives." "The Bank imposed 21 penalties on financial institutions to the tune of N430.00 million, for infractions ranging from delays in resolving customer complaints to failure to comply with the Bank's directives," the report stated. The report showed that the regulator received 23,129 consumer complaints in 2025, representing a 10.53 percent increase from the 20,925 complaints recorded in 2024. The apex bank attributed the rise not to worsening banking services but to increased public awareness and growing confidence in its consumer complaint resolution mechanism. "The trend reflected increased awareness and improved confidence in the Bank's consumer complaint resolution process," the CBN noted. The regulator also reported improvements in complaint resolution, stating that 18,824 complaints were successfully resolved in 2025, up 9.36 percent from 17,213 cases resolved in the previous year. Claims denominated in naira increased to N40.61 billion from N17.13 billion in 2024, while foreign currency claims surged to $344.2 million, compared with $1.06 million recorded a year earlier. As a result of the complaint resolution process, customers recovered N19.12 billion and $329.3 million in refunds during the year, more than double the N9.66 billion and $670,000 refunded in 2024. In addition to the consumer protection sanctions, the CBN disclosed that it imposed 11 separate penalties worth N1.26 billion on financial institutions for broader regulatory violations and failure to respond to supervisory queries. The latest report follows recent remarks by CBN Governor Olayemi Cardoso, who disclosed that the apex bank and deposit money banks are reviewing excessive transaction alerts and multiple customer charges following widespread complaints by bank customers. Cardoso also announced the establishment of a quarterly engagement platform involving the CBN, commercial banks and leading microfinance banks to improve the resolution of customer complaints and strengthen consumer confidence in the financial system. Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said imposing penalties on banks that fail to resolve customer complaints promptly sends a strong signal that consumer protection is becoming a regulatory priority. According to him, effective dispute resolution is essential to maintaining public trust in the financial system, particularly as digital banking transactions continue to grow rapidly. He added that while the increase in complaints may appear concerning, it also reflects greater public awareness of available redress mechanisms and improved confidence in the CBN's consumer protection framework.

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