A new survey from the Central Bank of Nigeria (CBN) has painted a contrasting picture of the nation’s credit health, indicating that while Nigerian households are increasingly struggling to repay secured loans like mortgages, the corporate sector, particularly big businesses, is showing greater resilience.
The CBN’s Credit Condition Survey for the third quarter of 2025 (Q3’25), released yesterday, detailed a worrying rise in default rates for secured household loans, even as default rates for unsecured personal loans and corporate borrowing saw a noticeable decrease.
A financial analyst in Lagos, Mr. Tunde Williams, reacted to the findings with concern. “This is a clear signal of the intense pressure on the average Nigerian,” he said. “When people begin to default on loans backed by assets like their homes, it tells you that disposable income has been severely eroded. Essentials are taking priority over contractual debt obligations.”
Surprisingly, the report highlighted that lenders reported an increased willingness to issue credit across the board in Q3 2025 compared to the previous quarter. For secured and corporate loans, this was attributed to a “changing economic outlook.” For unsecured personal loans, which carry a higher risk, the driving factor was a “changing appetite for risk” among lenders.
The report stated, “Lenders reported a decrease in default rates for unsecured lending while experiencing an increase in default rates for secured lending during the review quarter.”
Specifically, the survey noted improved creditworthiness among businesses of all sizes. “In terms of corporate lending, small businesses, medium-sized Private Non-Financial Corporations (PNFCs), large PNFCs, and Other Financial Corporations (OFCs) all reported lower default rates,” the CBN document confirmed.
Further dissecting the cost of borrowing, the survey revealed that the overall spreads on secured and unsecured lending rates to households relative to the Monetary Policy Rate (MPR) widened. This implies that the effective interest rates for these loans became less favourable for consumers.
For corporate clients, the picture was mixed but generally more positive. The spreads on loans narrowed for medium-sized firms and OFCs, meaning their cost of borrowing decreased relative to the MPR. However, small businesses and large PNFCs saw their spreads widen slightly.
A senior banker in Abuja, who spoke on condition of anonymity, suggested the data reflects the current economic realities. “Corporates, especially the large ones, have better structures to hedge against economic headwinds and access forex. The common man with a salary does not. This divergence was inevitable and is now being confirmed by the data.”
The CBN report confirms that while the corporate sector may be navigating the economic landscape with increasing confidence, a significant segment of the household sector is faltering under the weight of secured debt, raising concerns about financial stability at the consumer level.
