Personal Loan Borrowing in Nigeria Jumps 14.3% in January 2024

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Nigerians borrowed 14.3% more for personal needs in January 2024 compared to December 2023, according to a recent report from the Central Bank of Nigeria (CBN).

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In January 2024, the total value of personal loans reached N3.03 trillion, up from N2.648 trillion in December 2023. The CBN report highlighted that total consumer credit outstanding rose by 11.9% to N3.823 trillion, driven mainly by the increase in personal loans amid heightened inflation.

Personal loans dominated the consumer credit landscape, making up 79.2% of the total, while retail loans accounted for 20.8%.

Nigerians are increasingly relying on personal loans as inflation erodes their purchasing power and living standards.

The Nigerian Bureau of Statistics reported that the annual inflation rate hit 29.90% in January 2024, driven by Naira devaluation. Inflation continued to accelerate, reaching 33.95% in May 2024, up from 33.69% in April 2024, primarily due to rising food and non-alcoholic beverage prices.

A study by SBM Intelligence revealed that 27% of Nigerians across various income levels are now turning to loan apps to manage living expenses amid record inflation. The demand for personal loans coincides with the rapid growth of digital lenders.

The number of approved digital lenders in Nigeria increased by 64.16% since April 2023, reflecting the growing credit appetite of Nigerians facing diminishing purchasing power and higher prices, as reported by BusinessDay.

The Federal Competition and Consumer Protection Commission (FCCPC) noted that the number of digital lenders rose to 284 in May 2024 from 173 in April 2023.

Bukola Sunday, an eggs retailer in Lagos, shared her experience of resorting to loans to sustain her business. “With the prices of items rising so rapidly, I have been struggling to keep my business. I had no choice but to resort to LAPO to boost my business and put food on the table,” she said.

Adeshina Adewumi, CEO and founder of Trade Lenda, echoed this sentiment, stating, “Rising costs directly impact the need to access more funds.”

Emman Tochi
Emman Tochihttps://naija247news.com
Emma Tochi is Naija247news Media Northern Bureau Chief, he's based in FCT Abuja. He overseas the northern operations of this business media

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