PERSONAL loans declined to N1.75tn in the fourth quarter of 2022 from N1.85tn in the previous quarter, according to the Central Bank of Nigeria.

The CBN, in its economic report for the fourth quarter of 2022, noted that there was a total decline in consumer credit due to higher borrowing costs.

It stated that consumer credit, which consisted of personal and retail loans, 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 effect of 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 at the preceding quarter. Consequently, consumer credit as a share of total claims on the private sector declined by 0.6 percentage point to 8.1 per cent, from 8.7 per cent in the preceding quarter.”

It was further disclosed that personal loans accounted for 75.6 per cent of the total consumer credit, while retail loans accounted for 24.4 per cent in Q4.

This decrease in consumer credit occurred due to the tightening monetary policies of the CBN to curb inflation.

The central bank has hiked the interest rate six times since last year from 11.5 per cent to 19 per cent.

[NaijaNews]