Amid the hike in borrowing costs, personal loans declined to 1.75 trillion in the Fourth quarter of 2022 from 1.85 trillion in the Third Quarter, according to the Central Bank of Nigeria.
In the last six months, the Central Bank of Nigeria has hiked its Monetary Policy Rate, also known as the interest rate, from 11.5 per cent to 18 per cent to curtail rising inflation.
Despite the hike in rate, Nigeria’s inflation rate had continued to rise, with the latest April figure hitting 22.22 per cent.
Consequently, the consumer loan declined by 3.5 per cent from N2.4tn in Q3 to N2.32 in Q4 2022.
The report read, “Consumer credit declined owing to the higher cost of borrowing following the 250-basis points policy rate hike that characterised the period.
“Consumer credit declined by 3.5 per cent to N2,318.63 billion at the end of the fourth quarter of 2022 from N2,402.67 billion recorded in the preceding quarter.
“Consequently, consumer credit as a share of total claims on the private sector declined by 0.6 percentage points to 8.1 per cent, from 8.7 per cent in the preceding quarter.”