Nigerians have resorted to loans as one of their survival strategies, as a report by the Central Bank of Nigeria (CBN), said consumer credit jumped by 12 per cent to approximately ₦3.9bn in January 2024, riding on the back of majorly heightened inflation.
The apex bank’s latest monthly economic report indicates that total consumer credit outstanding rose to N3,823 billion in January 2024.
Further analysis of consumer credit revealed that personal loans increased by 14.3 percent to N3,028 billion from N2,649 billion in December 2023. Meanwhile, retail loans saw a 4 percent rise to N795 billion. Personal loans accounted for 79 percent of consumer credit, while retail loans made up 21 percent.
However, consumer credit as a share of total credit from Online Data Capture Systems (ODCs) decreased to around 7 percent from 8 percent in the previous month, as stated in the report.
The headline inflation rate, reported by the National Bureau of Statistics (NBS), surged to 33.95 percent in May, prompting consecutive interest rate hikes by the apex bank to 26.25 percent.
The escalating inflation has left Nigerians grappling with the effects of an economic crisis, as the cost of living continues to rise.
A study conducted by SBM Intelligence found that 27 percent of Nigerians across various income categories now turn to loan apps to manage their living expenses amidst record inflation.
The increased demand for these loan apps underscores the significant impact of relentless inflationary pressures on the daily lives of Nigerians, particularly those facing limited financial resources.