CBN says Nigerians repays N4.05tn personal loans in Q2

• New report found that Nigerians repaid N4.05tn in personal loans during the second quarter of 2024
• This repayment reduced personal loan balances from N7.52tn in the first quarter to N3.47tn
• This aligns with the CBN’s monetary policy adjustments to curb inflation and control money supply

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

During the second quarter of 2024, Nigerians paid back N4.05 trillion in personal loans.

Borrowing has become more costly due to rising interest rates. Photo Credit: Contributor
Source: Getty Images

According to the Central Bank of Nigeria's most recent quarterly economic report, this payback resulted in a 53.9% fall in personal loan balances, from N7.52 trillion in the first quarter to N3.47 trillion in the second.

This pattern aligns with the CBN's monetary policy changes intended to reduce inflation and manage the money supply.

The PUNCH reported that during the first half of this year, Nigerians obtained personal loans totaling over N5.49 trillion from banks and other financial organizations.

Given that the CBN raised interest rates in Q1 2024, it indicates that Nigerians have paid back roughly 74% of the new personal loans they took out.

Borrowing has become more costly due to rising interest rates, which has caused consumers to prioritize paying off their current obligations over taking on new ones.

In the second quarter, the total amount of consumer credit outstanding decreased by 42.6% to N4.73 trillion.

Retail loans rose from N0.72 trillion to N1.26 trillion, showing a trend towards smaller-scale credit facilities, while personal loans made up 73.35 percent of total consumer credit.

This implies that while people are paying off their debts, small retail firms are having to take out more loans in order to survive the high cost of doing business in the nation.

The CBN report read,

“Consumer credit outstanding declined by 42.60 per cent to N4.73tn in Q22024, relative to the level in the preceding quarter. Personal loans fell to N3.47tn, from N7.52tn in Q12024, but remained dominant accounting for 73.35 per cent of the total consumer credit. Retail loans, however, grew to N1.26tn from N0.72tn in the preceding period.”

The monetary policy rate was raised five times by the apex bank under Yemi Cardoso in an effort to fight inflation and promote economic stability.

CBN orders Nigerian Banks to refund N7.05bn

Legit.ng reported that the Central Bank of Nigeria has stated that following its intervention, banks in the nation have returned around N7.05 billion and $714,569.03 to their customers.

In just one year, the apex bank said it addressed 19,988 customer complaints within eight months.

This was revealed on Tuesday in the CBN UPDATE September Special Edition, the apex bank's monthly bulletin that was posted online.

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Source: Legit.ng