Banks operating in Nigeria have reported a broad rise in loan defaults across households and businesses, showing growing stress in the credit market despite improved loan supply and rising demand.
According to the Central Bank of Nigeria’s Credit Conditions Survey for the fourth quarter of 2025, lenders recorded higher default rates on secured, unsecured, and all categories of corporate lending during the period under review.
The findings point to worsening repayment capacity among borrowers as high interest rates, weak consumer incomes, and elevated operating costs continue to weigh on economic activity.
“Lenders reported higher default rates for Secured, Unsecured, and all Corporate lending types in Q4 2025,” the report read.
The survey shows that default rates on secured loans rose further in the fourth quarter, with lenders reporting a net balance of minus 2.2 points.
Although this marked an improvement from the deeper negative readings recorded in parts of 2023 and early 2024, banks noted that repayment challenges persisted even where loans were backed by collateral, reflecting the depth of financial strain facing borrowers.
Unsecured household lending also deteriorated, with a net default balance of minus 3.0 points in the quarter.
