Personal loans in Nigeria hit N2.06tn in May 2026 as rising costs and financial pressure push more Nigerians to borrow.
Nigerians borrow more as living costs bite
Nigerians increased their reliance on personal loans in May as rising living costs continued to squeeze household finances. Personal loans climbed to an estimated N2.06tn during the month, according to the Central Bank of Nigeria’s May 2026 Economic Report.
The figure represents 64.78 per cent of the N3.18tn consumer credit outstanding in May. It also shows how strongly personal borrowing dominates Nigeria’s consumer credit market.
Overall, consumer credit grew by 1.60 per cent during the month. The balance increased from N3.13tn in April to N3.18tn in May. In practical terms, Nigerians added about N50bn to their consumer debt within one month.
The CBN said,
“Consumer credit outstanding increased by 1.60 per cent to N3.18tn from N3.13tn in the preceding month, driven by growth in personal and retail loans, which rose by 1.98 and 0.90 per cent, respectively.”
The latest figures point to a growing dependence on credit at a time when many households continue to struggle with high expenses.
Personal loans remain the biggest credit category
Personal loans continued to account for the largest share of consumer credit in May. The CBN put their share at 64.78 per cent, leaving retail loans with 35.22 per cent.
Based on those proportions, personal loans reached about N2.06tn. Retail loans stood at approximately N1.12tn.
Personal borrowing also recorded stronger growth during the month. The category rose by 1.98 per cent, which translates to roughly N40bn in additional borrowing.
Retail loans grew by 0.90 per cent. These loans generally cover credit linked to the purchase of goods and services.
The difference shows that Nigerians relied more heavily on personal credit than retail financing during the period. That trend matters because personal loans can help households manage immediate financial needs when income fails to keep pace with expenses.
Weak spending meets rising financial pressure
The increase in borrowing came against a difficult economic backdrop. The CBN reported that economic activity remained weak in May, with its composite Purchasing Managers’ Index standing at 49.60 points.
Although the index improved slightly from 49.40 points in April, it remained below the 50-point mark. A reading below 50 generally signals contraction.
The CBN linked the contraction to subdued demand, falling new orders and higher production costs. It also highlighted weak consumer spending and rising energy costs across the industry and services sectors.
Inflation added another layer of pressure. Headline inflation rose to 15.93 per cent in May from 15.69 per cent in April.
However, monthly inflation slowed during the period. It fell from 2.13 per cent in April to 1.75 per cent in May.
For households, the combination creates a difficult balancing act. People may spend less because prices remain high, yet they may also borrow more to cover essential expenses.
More Nigerians now borrow to cope
The rising personal loan figures also match a wider shift in why Nigerians seek credit.
The 2026 Access to Financial Services in Nigeria Survey found that 40.8 per cent of formal borrowers used loans for coping and consumption. That share stood at 31.7 per cent in 2023.
In other words, more Nigerians now use formal credit to handle immediate needs rather than invest in activities that can generate income.
Productive borrowing, meanwhile, dropped from 40.2 per cent in 2023 to 34.3 per cent in 2026. Borrowing for household assets also declined from 25.2 per cent to 23.4 per cent.
The report warned about the shift, saying,
“We need to ensure that credit builds productive capacity and does not produce distress.”
Formal credit use has nevertheless expanded. The share of adults using formal credit rose from six per cent in 2023 to 10 per cent in 2026. About 11.9 million Nigerians now borrow from regulated financial institutions.
When informal borrowing also enters the picture, 36 per cent of Nigerian adults have access to some form of credit.
Young Nigerians and informal workers join the trend
Credit use has also increased among groups that traditionally faced greater difficulty accessing formal loans.
Among informally employed Nigerians, credit use tripled from five per cent in 2023 to 15 per cent in 2026. Borrowing among Nigerians aged 18 to 35 also increased from four per cent to 10 per cent.
Business owners recorded a similar rise, with borrowing increasing from four per cent to 10 per cent. Farmers also saw credit use rise from two per cent to six per cent.
However, wider access to credit does not necessarily mean better financial health.
The survey found that 45.8 per cent of formal-credit users experienced some level of repayment stress. Even more Nigerians reported broader financial pressure, with 83.8 per cent saying they experienced ongoing financial stress.
The figures therefore tell two sides of the same story. More Nigerians can access formal credit, but many also depend on that credit to survive rising financial pressure.
For households already struggling with high costs, personal loans may provide temporary relief. Yet the growing use of credit for consumption also raises concerns about how easily short-term borrowing can turn into long-term debt.
