Nigeria’s credit ecosystem is facing fresh pressure as the Central Bank of Nigeria’s latest Credit Conditions Survey reveals a notable rise in loan defaults across unsecured and corporate lending categories during the third quarter of 2025.
The quarterly survey, dated September 2025, shows a growing vulnerability among businesses and households as lenders report increased defaults from small enterprises, medium-sized private non-financial corporations, large corporations and other financial companies.
The report indicates that secured loans performed better, yet unsecured credit—often used to support cash-strapped households and businesses—recorded the sharpest decline in repayment performance. Analysts attribute the trend to persistent macroeconomic stress marked by high interest rates, rising operational expenses and weakened consumer demand.
Despite the climb in defaults, lenders expanded overall credit availability during the period. The CBN links this expansion to improved economic expectations for secured and corporate lending, while a shift in lenders’ risk appetite supported growth in unsecured credit supply.
Demand for loans also strengthened in Q3 2025. Borrowing rose across household consumer loans, house purchase credit and corporate loans to small, medium and large companies. However, demand slowed for secured mortgages, remortgages and unsecured credit card facilities as households navigated tighter financial conditions.
Loan pricing indicators show wider spreads on household credit relative to the Monetary Policy Rate, with secured and unsecured lending spreads reported at -0.1 and -1.8 index points. Corporate lending spreads narrowed for medium-sized firms and other financial corporations but widened again for small businesses and large corporates, reflecting varied risk perceptions within sectors.
The survey finds that lenders approved a higher proportion of loan requests across all categories, signalling continued willingness to support credit growth even as repayment challenges mount.
With unsecured and corporate defaults climbing, the CBN’s report underscores the urgency for banks to enhance risk assessment frameworks and for borrowers to prioritise disciplined repayment amid ongoing economic uncertainty.
