The uptick in consumer credit continued in October last year, rising 37 percent year-on-year to N2 trillion, driven by improved credit ratings and product diversification offered by banks and other lenders. Consumer credit volume was N1.47 trillion as of October 2020.
Findings from data from the Central Bank of Nigeria, CBN, Monthly Economic Report for October 2021 showed that consumer credit growth was driven by a 52 percent yoy increase in personal loans to N1.57 trillion in October 2021.
As a result, the share of personal loans in the total consumer loan basket increased from 70.4 percent in October 2020 to 78 percent in October 2021.
However, consumer credit increased month-on-month, MoM, by just 3.4 percent to N2 trillion in October 2021, from N1.94 trillion in September 2021.
According to CBN data, the continued growth in consumer credit, particularly personal credit, is due to improved credit ratings and a diversified product offering by banks.
The CBN stated: “Outstanding consumer loans increased due to growth in personal loans resulting from improved credit ratings and a diverse product offering.
“Total consumer credit originated by Other Depository Corporations (ODCs) increased 3.4 percent to n2,009.88 billion at the end of October 2021, from n1,942.87 billion at the end of September 2021.
“The ratio of consumer credit to total credit to the private sector was 8.7 percent in October 2021, the same percentage as in the previous month.
“A breakdown of consumer credit showed that personal credit maintained its dominance at 78.0 percent, rising 2.3 percentage points from the previous month’s level, while personal credit made up the remainder of 22.0 percent.”