Banks in Nigeria recorded a notable increase in loan defaults among both households and corporate borrowers in the fourth quarter of 2025, reflecting mounting repayment pressures amid challenging economic conditions.
The Central Bank of Nigeria (CBN) disclosed this trend in its Credit Conditions Survey (CCS) Report for Q4 2025.
The report highlighted higher default rates on secured and unsecured household loans, as well as across corporate lending categories, including small businesses, Private Non-Financial Corporations (PNFCs), and Other Financial Corporations (OFCs).
Despite an improved availability of credit during the quarter, lenders reported heightened credit risks.
The survey indicated that banks increased lending to households and corporates, driven by stronger demand for consumer loans, mortgages, overdrafts, and corporate facilities for inventory financing and capital investment. However, many borrowers struggled to meet repayment obligations, leading to rising defaults.
On loan pricing, the survey revealed that spreads on secured and unsecured household loans widened relative to the Monetary Policy Rate (MPR), reflecting tighter risk-based pricing by banks. I
n contrast, lending spreads narrowed for corporate loans to small businesses, large PNFCs, and OFCs, while medium-sized PNFCs experienced wider spreads, suggesting that banks are differentiating credit risk across corporate segments.
The CBN’s findings underscore increasing credit stress in the banking sector as households and businesses contend with repayment pressures, even amid easier access to loans and supportive lending conditions.