As inflation increases, Nigerians Borrow ₦3.9 Billion — CBN

 


The Central Bank of Nigeria said that, largely due to higher inflation, consumer credit increased by 12% to over ₦3.9 billion in January 2024, indicating that Nigerians had turned to loans as one of their survival tactics.

According to the apex bank’s latest monthly economic report, the total consumer credit outstanding increased to N3,823bn in January 2024. The report further explained that a disaggregation of consumer credit revealed, that personal loans increased by 14.3 per cent to N3,028bn from N2,649bn in December 2023. Retail loans rose by 4 per cent to N795bn, as personal loans accounted for 79 per cent of consumer credit, while retail loans accounted for 21 per cent. Consumer credit, as a share of total credit from Online Data Capture Systems (ODCs), however, declined to about 7 per cent, from 8 per cent in the preceding month, the report added.

This is because the National Bureau of Statistics (NBS) reported headline inflation rate of 33.95 percent in May, which prompted the central bank to raise interest rates to 26.25 percent in a consecutive manner. Since then, as the cost of living has increased due to growing inflation, Nigerians have been experiencing the effects of the worst economic crisis.
According to an SBM Intelligence report, 27% of Nigerians across all income brackets currently use loan applications to cover their living expenditures in the midst of historically high inflation.

The sharp increase in demand for these lending applications is a sign of how seriously the persistent inflationary pressures are affecting Nigerians' everyday lives, particularly for those who are already struggling with tight budgets.


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