Personal loans owed by Nigerians to commercial banks fell from N7.52 trillion in the first quarter of 2024 to N3.47 trillion in the second quarter of the year as Nigerians continue to face high interest rates on their debts.
This is according to the latest CBN’s quarterly economic report for Q2 2024, which was obtained by Naijaonpoint.
According to the report, personal loan balances dropped from N7.52 trillion in the first quarter to N3.47 trillion in the second quarter, marking a 53.9% decrease.
This is in sharp contrast to the N5.49 trillion added in the first quarter of 2024.
The CBN report read: “Consumer credit outstanding declined by 42.60% to N4.73 trillion in Q22024, relative to the level in the preceding quarter. Personal loans fell to N3.47 trillion, from N7.52 trillion in Q12024, but remained dominant accounting for 73.35% of the total consumer credit. Retail loans, however, grew to N1.26 trillion from N0.72 trillion in the preceding period.”
The apex bank, under Yemi Cardoso, increased the monetary policy rate (MPR) five times to combat inflation and foster economic stability.
It noted: “Fitch expects the banking sector’s regulatory non-performing loans (end-1Q24: 5.1%) to increase in 2024 due to high inflation and interest rates. However, loan books are small (end-2023: 35% of banking sector assets).”
According to the September 2024 Inflation Expectations Survey by the CBN, not less than 71.4% of Nigerians are calling for a reduction in interest rates amid growing concerns about inflation and economic hardship.
The CBN will hold its next MPC meeting from November 25-26, 2024. It is expected that the committee will continue to increase the MPR as high inflation persists.