- Consumer credit rose to N4.42 trillion in November 2024
- The increase was largely driven by inflation expectations
- There was improved banking system liquidity in the period
Consumer credit rose to N4.42 trillion in November 2024, a 26.29 per cent increase from the N3.5 trillion recorded in October 2024.
This is according to the latest Monthly Economic Report of the Central Bank of Nigeria (CBN), noting that the increase was largely driven by inflation expectations, which pushed individuals to seek more credit to meet their financial needs.
The trend reflects both the growing demand for credit facilities despite a high interest rate regime in 2024 and lenders’ willingness to extend more credit to consumers.
The report shows increases in personal loans, primarily used for household expenditures and retail loans.
“Consumer credit outstanding increased significantly by 26.29 per cent to N4.42 trillion from the level in the preceding month, due, largely, to inflation expectations.
“Personal loans grew by 37.76 percent to N3.32 trillion, from N2.41 trillion at end-October 2024.
“Similarly, retail loans increased by 1.83 per cent to N1.11 trillion from N1.09 trillion in the preceding month.
“Personal loans accounted for 74.95 per cent of total consumer credit, while retail loans constituted the balance,” the report read.
Improved banking system liquidity
The rise in consumer credit is reflected in banking system liquidity, which improved significantly in November 2024.
According to provisional data from the CBN, the average net industry balance increased by 25.27 per cent to N0.14 trillion, up from N0.11 trillion in October.
The increase was driven by inflows from the Federation Account Allocation Committee (FAAC) disbursements, Open Market Operations (OMO) repayments, Cash Reserve Requirement (CRR) refunds, and Nigerian Treasury Bills (NTBs) repayments.
Banking activity at the standing deposit facility (SDF) window increased during the month, while transactions at the standing lending facility (SLF) window declined.
Total transactions at the SDF window grew by 36.88 per cent to N4.12 trillion from N3.01 trillion in October 2024.
On the other hand, transactions at the SLF window declined by 37.60 per cent to N10.57 trillion, from N16.94 trillion in October 2024.
Banks, other financial institutions reported higher loan default rates in Q4 2024 – CBN
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) said lenders, including commercial banks and other financial institutions, recorded higher default rates for secured, unsecured, and corporate loans in the fourth quarter (Q4) of last year 2024.
The CBN revealed this in its Q4 2024 Credit Conditions Survey Report published on its website.
