By Ajibola Olaide, JKNewsMedia Reporter
HIGH INTEREST rates pushed outstanding consumer credit down by 19.89 per cent to N3.78 trillion in 2025, marking the first annual decline in six years, according to the Central Bank of Nigeria (CBN).
JKNewsMedia.com reports that the apex bank disclosed this in its 2025 Annual Report and Statement of Accounts, which also revealed that the banking industry’s fraud watchlist expanded significantly during the year.
The number of Bank Verification Numbers (BVNs) flagged for fraud rose by 38.4 per cent to 13,117 from 9,476 in 2024, reflecting stronger fraud detection and monitoring by financial institutions.
According to the report, consumer credit outstanding fell from N4.72 trillion in 2024 to N3.78 trillion in 2025, ending a growth streak that had continued since December 2019.
“Consumer credit outstanding moderated in response to the dynamic interest rate environment,” the CBN said. “Consumer credit outstanding fell by 19.89 per cent to N3,783.40 billion in 2025 from N4,722.93 billion in the preceding period. The fall was the first since December 2019.”
The decline was driven primarily by a sharp reduction in personal loans, although retail lending expanded strongly and overtook personal loans as the largest component of consumer credit for the first time in several years.
Personal loans fell to N1.85 trillion, while retail loans surged by 63.77 per cent to N1.94 trillion. Consequently, retail loans accounted for 51.16 per cent of total consumer credit, compared with 48.84 per cent for personal loans.
Consumer credit also represented a smaller share of total private sector lending during the year. According to the CBN, it accounted for 6.6 per cent of total credit extended to the private sector by other depository corporations in 2025, down from 7.98 per cent in 2024.
The report further highlighted shifts in banks’ lending portfolios.
Short-term credit remained the largest asset category, although its share declined by 7.71 percentage points to 51.6 per cent.
Medium-term credit slipped marginally by 0.11 percentage points to 13.46 per cent, while long-term credit increased by 7.82 percentage points to 34.94 per cent.
Explaining the trend, the CBN said banks continued to favour shorter-tenor lending to align with the maturity profile of their funding.
“The dominance of short-term loans and advances reflected banks’ preference for matching short-term lending with short-term deposit liabilities,” the report stated.
Deposit liabilities with maturities of one year or less continued to dominate banks’ funding structure, rising slightly to 91 per cent in 2025 from 90.09 per cent in the previous year.
Medium-term deposit liabilities increased to 5.15 per cent from 2.63 per cent, while long-term deposits declined to 3.85 per cent from 7.28 per cent.
On fraud monitoring, the CBN said financial institutions added 3,641 BVNs to the industry’s fraud watchlist during the year as part of broader efforts to strengthen compliance and risk management.
“Fraud-related BVNs on the watchlist rose to 13,117 compared with 9,476 in the preceding period. This highlighted improvement in fraud monitoring and resolution,” the report said.
JKNewsMedia.com also reports that the bank said it was reflecting ongoing efforts to update customer records and reduce opportunities for identity fraud within the financial system.
Meanwhile, the BVN ecosystem continued to expand. Total BVN registrations increased to 67.82 million in 2025 from 64.40 million in 2024, representing an additional 3.42 million enrolments.
The number of bank accounts linked to BVNs rose to 368.92 million from 297.29 million, while active bank accounts increased to 339.26 million from 311.6 million.
According to the CBN, the growth in BVN enrolments, linked accounts and active accounts underscores continued progress in financial inclusion, stronger regulatory compliance and improved integrity of the country’s identity verification system.
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