Banks recorded an increase in loan defaults by households and corporates in the fourth quarter of 2025, reflecting mounting repayment pressures on consumers and businesses.
The Central Bank of Nigeria (CBN) disclosed this in its Credit Conditions Survey (CCS) Report for Q4 2025, which showed higher default rates on both secured and unsecured household loans, as well as across all categories of corporate lending.
According to the report, lenders experienced increased defaults on loans to small businesses, private non-financial corporations (PNFCs) and other financial corporations (OFCs), underscoring sustained financial strain on borrowers amid prevailing economic conditions.
The rise in defaults occurred despite improved access to credit during the quarter. Banks reported increased credit availability for secured, unsecured and corporate loans, driven by changes in economic outlook and lenders’ market share objectives.
Demand for credit also strengthened, particularly for consumer loans, mortgages, overdrafts and corporate facilities for inventory financing and capital investment.
However, the expansion in lending was accompanied by heightened credit risk, as many borrowers struggled to meet repayment obligations.
On pricing conditions, the survey showed that lending spreads on secured and unsecured household loans widened relative to the Monetary Policy Rate (MPR) in Q4 2025, reflecting tighter risk pricing by banks.
In contrast, spreads narrowed for corporate loans to small businesses, large PNFCs and OFCs, while widening for medium-sized PNFCs, indicating differentiated risk assessment across corporate segments.
